Dividend to non resident

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Parth Patel (Querist)

03 December 2012
Dividend paid by indian company to non resident...whether

1) Liability to deduct TDS arise us 195?
2) Non resident liable to tax on it and file IT return?

CA. ALOK SHARMA

CA. ALOK SHARMA (Expert)

03 December 2012 1. No liability to deduct TDS. because dividend income is exempt u/s 10 of Income Tax Act, 1961.
2. Non resident is not liable to Tax on it. But for liability of return other income and assets list of non resident will be required to be taken into consideration.

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Parth Patel

Parth Patel (Querist)

03 December 2012 Thank you so much for your reply.

Whether Indian Company liable for Div. Distri. Tax?
If yes,what is effective rate being turnover less than 1 crore?

CA. ALOK SHARMA

CA. ALOK SHARMA (Expert)

03 December 2012 Domestic co. is liable for DDT @ 15%. Plus surcharge of 5% and Cess of 3%.
Turnover doesnt matter.

CA. ALOK SHARMA

CA. ALOK SHARMA (Expert)

03 December 2012 Domestic co. is liable for DDT @ 15%. Plus surcharge of 5% and Cess of 3%.
Turnover doesnt matter.

Parth Patel

Parth Patel (Querist)

03 December 2012 Grateful for your assistance.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

03 December 2012 Here section 195 and sec 115O come into picture.

Section 195 which provides for deduction of TDS on payments to Non-Residents gives an exception wherein the dividends covered under section 115O are not liable for deduction of tax under section 195.

Section 115O is a code in itself and that provides for payment of Dividend Distibution Tax by Indian company and on dividends covered under section 115O there is exemption under section 10(34).

Anuj
femaquery@gmail.com

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