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Tds on dividend

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This query is : Resolved

Vinod Rai (Querist)
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23 July 2008 Hello Every body could anybody tell me regarding the tds on dividend.Whether tds on dividend is get deducted or not

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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23 July 2008 Tax at source is not required to be deducted on the dividend declared, distributed or paid by a company. In such a case, dividend distribution tax of 15% is payable by the company u/s 115O. However, tax at source is required to be deducted u/s 194 on the deemed dividends. Deemed dividend u/s 2(22)(e) has been defined and as per the said section the amount of advance to any director or shareholder can be treated as deemed dividend if the company is having accumulated profits available for distribution of dividends to the tune of advances. In that case the amount will be taxable in the hands of director/shareholder u/s 56 of the Income Tax Act. Also, the company will have to deduct Tax at Source u/s 194.

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