Dividend query - uk investor

As per the provisions of Sec 91A of the Income Tax Act, 1962, tax rates of that contracting state  would apply to the assessee where it is beneficial for the assessee.

Since Dividend is exempt in India in the hands of the shareholders as DDT is paid by the company under section 115-O, therefore no tax would apply to the assessee in India.

Originally posted by : Jinay
	As per the provisions of Sec 91A of the Income Tax Act, 1962, tax rates of that contracting state  would apply to the assessee where it is beneficial for the assessee. Since Dividend is exempt in India in the hands of the shareholders as DDT is paid by the company under section 115-O, therefore no tax would apply to the assessee in India.

So, the Indian Company pays DDT and the UK investor has to pay UK Dividend Tax and NO Indian Tax is applicable. Is that right ?

Bavan,

Investor will not pay any tax since he will take the benefir from the section 91A and India - England Tax Treaty.

Indian company will pay DDT on the Dividend Distribution which exempts the shareholder from paying any tax on the same. Plus when the treaty is read with Section 91A, it means that either investor will pay tax at 15% (Rate mentioned in the treaty as it is the tax rate of UK) or Exempt whichever is beneficial to him.

Therefore no tax is payable by the investor on his dividend income.

Regards,

Jinay

Thank you Jinay !!! Very helpful !!

Jinay ,

the provision of Income Tax Act is section 90.

Bavan,

Please ensure all the compliances including permission from RBI/FIPB(if applicable) should be checked before investment by UK Company.

Also the UK Company can claim DDT and underlying tax credits in UK in accordance with India UK DTAA.

Anuj

+91-9810106211

Anuj,

As regards the query, section 91A fits for the purpose.

Jinay,

Please be sensible enough to not to address your seniors by first name.

Also there is no sec 91A in Income Tax Act. There is sec 90A which talks of Agreements with associations but not COUNTRIES.

Anuj