Dividend on equity shares

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This query is : Resolved

ashok bhurani (Querist)

20 August 2014 Assessee is engaged in trading of shares & securities and profit for such trading business is chargeable to tax under the head profits & gains of business or profession.

Query:
1) Whether dividend earned on equity shares held for trading is business income or income from other sources.
2) Whether such dividend will be taxable if share trading is considered as business income considered as business income.

Rupesh Jain

Rupesh Jain (Expert)

20 August 2014 company declare the dividend after deposit the Tds . its tax free income in hand of recipient.

ashok bhurani

ashok bhurani (Querist)

20 August 2014 Will it make any difference if the shares are treated as stock in trade of assessee who receives dividend on such shares

Nikhil Kaushik

Nikhil Kaushik (Expert)

23 August 2014 no it doesn't make any difference whether such shares are part of stock-in-trade or capital asset. Dividend will always be considered as Income from other sources (though exempt if DDT is already paid by the company). please refer section 56(2)(i)

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