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dividend rec by foreign company

Gaurav Bari (8 Points)

19 May 2018

what is the treatment of dividend rec by foregin co by an individual assesse..??? And applicable section

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (194326 Points)
Replied 19 May 2018

Dividends are charged to tax under the head “Income from other sources” and hence dividend received from a foreign company is charged to tax under the head “Income from other sources”. Dividend received from foreign company will be included in the total income of the taxpayer and will be charged to tax at the rates applicable to the taxpayer.

Relief from double taxation

Dividend received from a foreign company is charged to tax in India as well as in the country to which the foreign company belongs. If the foreign dividend has suffered double taxation, then the taxpayer can claim double taxation relief either as per the provisions of Double Taxation Avoidance Agreement (if any) entered into with that country (if any) by the Government of India or can claim relief as per section 91 (if no such agreement exists).

To understand the tax treatment of the dividend received from a foreign company, the taxpayer should keep in mind the provisions of Income-tax Law as well as the provisions of Double Taxation Avoidance Agreement (DTAA) (if any) entered into with that country (if any).

Refer: tax treatment of dividend received.