Dividend received from company

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2012 pls. tell me whether company formed by a relative in which they are directors getting remuneration of rs. 160000/- for which they don't pay any tax (as basic exemption) and they himself declare dividend in the company and receive dividend from company. so i want to know whether this is allowed. because to avoid tax they dont charge high remuneration but collect it in the form of dividend.

pls, reply me
.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 January 2012 A company has to pay Div. Distribution Tax
also @ 15%.
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Dividend depends upon the No of shares held.
It is declared after paying taxes.
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In such a case, company has to pay Income Tax on its Profits also.
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DDT+IT = 50% of the Profit.
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It clearly shows that -there is something out of your notice.

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