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Tax on Dividends

Harish Naidu (Job) (193 Points)

13 May 2011

Hi, My uncle is a managing director of a Pvt Ltd Company. His is receiving Dividend of 50 Lakhs from the company. Dividend Distribution Tax has been paid by the company. Is this dividend income is fully exempted for my uncle or if he needs to show this in his return and pay income tax?

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10 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 13 May 2011

if dividend is received against shares hold by him, then tax free, but u have to disclose the same in return as tax free dividend

for other nature of dividend, furnish details

karinabartram (klhgy5ryt) (26 Points)
Replied 13 May 2011

Dividend income is exempt in the hands of shareholders if it is received from indian company. so it is tax free.

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Harpreet (* * * * * *) (1670 Points)
Replied 13 May 2011

agreed with above two replies

CA Nikhilesh Singla (CA) (83 Points)
Replied 13 May 2011

dividend is tax free if it is obtained from indian company..

so it is tax free for him..

saranraj (CA FINAL) (419 Points)
Replied 13 May 2011

Yes dividend is tax free when received from an Indian Company. The same has to be mentioned in the return of income as exempted income.

Abhishek Kumar mishra (B.Com M.Com CA FINAL CS FiINAL) (40 Points)
Replied 14 May 2011

u/s 10 (34) of income tax act,1961,dividend from domestic company is exempt from tax in the hands of securities holder because of the concept of dividend distribution tax.

but it has to b furnished in the return as an exempted item under the head INCOME FROM OTHER SOURCES.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 14 May 2011

just curious with amount mentioned,

many a places interest is mentioned as dividend to misguide ppls, viz as some places deposits are taken on "daily dividend" basis, but in real fact those are interst,

as the amount is significant high, i clarified that it its for share in company then exempted, but every receipt can not be dividend, so if anything else, then asked to share...................

CCI queries posters are absent to respond/update...thats the unfortunate scene in CCI

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 14 May 2011

dividend is tax free if receipt from indian co.

CA Asfar Hashmi (Research Associate) (81 Points)
Replied 18 May 2011

If DDT has been paid per sec 115O by the Indian Co.....d same is exempt u/s 10(34) in the hands of shareholder. No need to further check the nature of the receipts.

Rebecca Deavers (Accountant) (23 Points)
Replied 18 October 2014

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