Ddt

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rajesh (Querist)

15 November 2013 in pvt ltd director and shareholder are same and director declared dividend as well as pay ddt than In personal return of director dividend are exempt U/S 10(34)

Ajay Mishra

Ajay Mishra (Expert)

15 November 2013 Hi

INCOME-TAX PROVISIONS OF DIVIDEND

TDS not required to be deducted on dividend

With effect from 1st April, 2003, no deduction of tax will be made by an Indian company on dividend paid by it to resident shareholders who are individuals or Indian companies.

Payment of Dividend tax by company

During the financial year 2003-2004, as per section 115-O of the Income-tax Act, 1961, dividend other than deemed dividend under section 2(22)(e) will be subject to payment of tax by the companies declaring dividend.

Intimation for details of unclaimed dividend to shareholders alongwith notice of general meeting

The company in which any unpaid or unclaimed amount of dividend which is payable upto a period of seven years, should intimate to the shareholders concerned, individually, alongwith the notice of annual general meeting every year, the amount of unclaimed dividend due and payable to him and the period in respect of which it is payable.

Transfer of unpaid/unclaimed dividend amount to the Investor Education and Protection Fund

Section 205A(5) of the Companies Act, 1956 provides that any money transferred to the unpaid dividend account of a company, which remains unpaid or unclaimed for a period of seven years from the date of transfer shall be transferred by the company to Investor Education and Protection Fund.

In terms of the provisions of section 205C(2)(e) of the Act, the interest accrued on the amount of unpaid dividend shall also be credited to the Investor Education and Protection Fund and no amount of the fund shall become due for payment.

Nikhil Kaushik

Nikhil Kaushik (Expert)

15 November 2013 Dear Rajesh,

Yes you are correct. Once DDT is paid by the company, the said dividend shall be exempted from any tax in the hands of the shareholder.