1. Dividend received from the domestic company is exempt from payment of tax u/s 10(34) subject to limit specified u/s 115BBDA of Rs.10,00,000.
2. If an assessee is in receipt of dividend in excess of Rs. 10,00,000 during the year then dividend received in excess of Rs. 10,00,000 alone will be subject to tax @ 10%.
3. The above provision will equally be applicable for Non-residents.
4. In your case, dividend income credited directly to his bank account will not be subject to tax in India.
Please correct me if the above solution has an alternative view.
1. Yes, sec 115BBDA has specifically mentioned that dividends will be exempted only up to Rs. 10,00,000 only for the resident assessee.
2. By going by this wordings, it may not be applicable to non-resident and in return, entire amount of dividend received from the domestic company by a non-resident will be exempted from payment of tax.
Please correct me if the above solution has an alternative view.
Agree with @ Dhruv Shah. Furthermore, the second proviso to S. 195 states that no deduction is required to made in respect of dividends referred u/s. 115-O. Thus, even if 115BBDA would have been applicable to NR, deduction would not have been required.
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