| Originally posted by : Kartikey Jain | ||
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Rate of DDT is 15%. However the catch here is that it is to be computed on "grossing up" basis. So if a company has to declare dividend of Rs 100,000. Instead of Rs 15000 DDT, the tax would be calculated by [15% / (100%-15%)] X 10,000 ; which comes out to Rs 17,647. Plus a surcharge of 12% & cess of 3% will also be charged on it. So total tax outgo = Rs 20,357.58 That is why, often it is said that the effective rate of DDT is 20.358% |
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Kartikey Jain Please Correct Dvidend Distribution Tax U/s 115O 15%+12%Surcharge+3% Education Cess = 17.304% Subject to Grossing Up Grossing Up of DDT 100/(100-17.304)*17.304 = 20.925% Effective Rate On 100 Rs Dividend DDT U/s 115O is 20.925 Rs.
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