Dividend Distribution Tax

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Pranaav P (Querist)
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22 June 2008 I want to wind-up a private limited company, amongst reserves are :

Paid-up Share Capital 11 lacs
Capital Redemption Reserve 9 lacs
Profit & Loss Account 3 lacs

Capital Redemption Reserve is on account of Buy-Back of shares.

Is DDT payable on :
Paid-up Share Capital ?
CRR ?
P & L A/c. ?

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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24 June 2008 as per sec 2(22)(c) dividend includes distribution of profits on liquidation. i think CRR also represent profits and DDT shud be paid on CRR+P&L.

Pranaav P

Pranaav P (Querist)
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24 June 2008 Sir,
Thank you for your reply. But I am critical of the provisions for :
If CRR is representing profits, then why can't we issue shares and liquidate.
As that will cost Rs.20,000 , while DDT will be Rs.135,000+

Pranaav P

Pranaav P (Querist)
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CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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26 June 2008 in any case u need to pay DDT on 12 lacs as sec. 2(22)(d) includes all accumulated profits whether capitalised or not.

Pranaav P

Pranaav P (Querist)
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27 June 2008 Sir,
Thank you for your reply.

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