Hi Friends ,
I invite all of you for a discussion on whether dividend distribution tax constitutes double taxation or not ?
- Dividend is paid after P.A.T that means the company has already paid a tax on this income ,the company is also not allowed any deduction for paying dividend , so while paying dividend to shareholders again DDT has to be paid of aprox 16 % so on the same income tax has been paid twice once as income tax and second as DDT making effective tax rate of aprox 46 % which is way too harsh for investors.
I am puting forth this issue for discussion as i and my friends intend to open a Private Limited Company and the problem we are facing is how can we pay back money to our investors , if are supposed to pay DDT we end up paying 46 % to goverment. So if anyone has a solution to this problem please help.
CAclubindia
