Dividend distribution tax

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A. Gupta (Querist)
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12 June 2010 Dear friends,

In budget 2010, surcharge on domestic companies has been reduced to 7.5% from 10%.

A company has proposed dividend in its audited balance sheet as on 31.3.2010. On 01.06.2010, its board of directors passed the resolution for declaration of dividend.

My query is for calculating dividend distribution tax, surcharge rate shall be 10% or 7.5%? Which rate of surcharge will be applicable as dividend was proposed in the audited accounts for FY 2009-10 but it is declared in FY 2010-11.

According to me, surcharge @ 7.5% should be charged.

Please give your opinion.

Thnks & Rgds.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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12 June 2010 No. Surcharges will be applicable @10% as the dividend is being paid in respect of Financial Year 2009-10.

Krishan

Krishan (Expert)
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12 June 2010 Yes... Surcharge rate would be 10%. as the distribution of profit relates to AY 10-11..

Pankaj Jhawar

Pankaj Jhawar (Expert)
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12 June 2010 No surcharge will be 7.5% because it is declerared, paid and distributed in 2010-11.

A. Gupta

A. Gupta (Querist)
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12 June 2010 Dear Friends,

The problem still continues - 10% or 7.5%?

CA. Bikash Bogi

CA. Bikash Bogi (Expert)
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13 June 2010 I am Agree with Sanjay & Krishnan......Surcharge will be applicable @ 10% instead of 7.5%. Because dividend is in respect of F.Y. 2009-10

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