Ddt u/s. 1150 as per finance act, 2015

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CS Arjun Rajagopal (Querist)
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04 March 2016 Dear Experts,

What is the formula for arriving basic rate of DDT 17.647%? When the Act says DDT is (15% basic rate+ 12%surcharge+3%cess). Also effective rate is 20.358%. How the grossing up is also done?

Iam confused!!! I would be grateful if some body can clarify this.

Regards,
Arjun Rajagopal

Ankur Singhal

Ankur Singhal (Expert)
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04 March 2016 Dear
In grossing up concept we take the tax rate% and divide it by 100 minus the tax rate and multiply by 100. we get the basic rate.after that we add the surcharge and then cess.
In your example we divide 15/85*100 and we get 17.467%. Add surcharge and cess.
This is done as 15% is net tax by grossing up it become the gross tax.

CS Arjun Rajagopal

CS Arjun Rajagopal (Querist)
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05 March 2016 Thank You so much Ankur Sir. Now the concept is well clear.

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