Calculation of CDT

So DDT is a dividend on shareholders income which is payable by company on behalf of them. Now say company has a share of Face value 1000 and wants to declare a 10% dividend this amounts to Rs.100 (this amount should go as net amount to shareholders pocket) so company has to gross it up by using DDT 15% + surcharge of 12% (on amount of DDT) + 3% of cess =15(DDT) +1.8(15*12%-surcharge)+0.504(16.8*3%)=17.304% Now the dividend declared above should be net of tax deducted by 17.304% so above dividend should be (100-17.304)%=82.696%. Dividend is 100 so gross amount comes 100/82.696%= 120.93 and so divided % on gross amount is 20.93%.