Corporate dividend tax

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lavanya (Querist)

16 August 2014 What is corporate dividend tax, and what is deemed dividend?
Please explain me the tax impact in both cases.
Thank you

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 August 2014 corporate dividend tax (dividend distribution tax) is the tax charged under section 115-O of the Income-tax Act. This tax is paid by the Company itself.

For definition of dividend please refer section 2(22) of the Income-tax Act. Section 2(22)(e) deals with deemed dividend. The tax on deemed dividend is borne by the recipient.

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lavanya

lavanya (Querist)

17 August 2014 Can u please explain the difference between corporate dividend tax and tax on deemed dividend.. Y tax on deemed dividend is borne by the recipient and not the company?

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 August 2014 because deemed dividend is not declared by the company. Deemed dividend is a deeming provision of income-tax act and has nothing to with the company.

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