Menu
Deemed Dividend tax
In a deemed dividend situation what is the DEEMED DIVIDEND TAX to be paid by the company. Also whether it is tax free in the hands of the shareholders or more than 10 lacs will be taxable ?
Replies (3)
Deemed Dividend u/s 2(22)(a) / (b) / (c) / (d) = taxable in the hands of shareholders subject to Sec. 115 BBDA (limit or Rs. 10,00,000)
However , Deemed Dividend u/s 2(22)(e) = exempt in the hands of shareholders
Deemed Dividend u/s 2(22)(a) / (b) / (c) / (d) = Company pays DDT u/s 115 O (with Gross - Up)
However , Deemed Dividend u/s 2(22)(e) = Company pays DDT @ 30 % (without Gross - Up)
It is to be noted that w.e.f April 1, 2020, dividends are taxable only in the hands of shareholders including in the deemed dividend scenario. so, tax rates will be based on the taxability of shareholders
Related Threads
CAclubindia
