Dividend Distribution Tax

Section 115-O - Tax on distributed profits of the Domestic companies (i) This section overrides all other provisions of the Act. If for any assessment year, any amount is declared, distributed or paid by a domestic company by way of dividends (whether interim or otherwise) whether out of current or accumulated profits it shall pay an additional income-tax on the dividends (being called the Corporate Dividend Tax) at the rate of 15%. For the purpose of calculating the CDT, the above said amount of Dividend declared, distributed or paid shall be reduced by the amount of dividend, if any, received by the distributing domestic company during the financial year. However, the following conditions have to be satisfied in this regards: (a) such dividend is received from its subsidiary8; (b) the subsidiary has paid CDT on such dividend; and (c) the domestic company is not a subsidiary of any other company. However, the same amount of dividend shall not be taken into account for reduction more than once.