Dividend distribution tax

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sandeep

sandeep (Querist)
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20 July 2009 What is the divident distribution tax and what is the rate and when it is payable?

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 July 2009 Dividend distribution tax is an additional income tax ( also called tax on distributed profits) payable on the amount of dividend declared, distributed or paid by an Indian domestic company.

jasmine

jasmine (Expert)
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20 July 2009 Dividend distribution tax is the tax levied by the Indian Government on companies according to the dividend paid to a company's investors.

At present the dividend distribution tax is 15% [1], according to the Union Budget 2007, India.

As per existing tax provisions, income from dividends is tax free in the hands of the investor. However, this is not to say that there is no tax levied at all. On the contrary, there is a levy of 15% of the dividend declared as distribution tax. This tax is paid out of the profits/reserves of the company declaring the dividend.

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