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Dividend tax??

CA Final 527 views 2 replies

Y ltd in which 80% shares are held by G ltd. Y ltd declared a dividend amounting to rs 30 lacs to the shareholders for the financial year 2011-12 in its annual general meeting held on 18th may 2012. Dividend distribuion tax was paid by Y LTD on 20th May 2012. G ltd declared an interim dividend amounting to Rs 40 lacs on 1st december 2012 for the year ended 31st march 2013

 

Compute the amount of tax on dividend payble by G ltd.

 

What if 52% shares of Gltd are held by S ltd, an Indian company???

Replies (2)

DDT will be for (40lacs-24lacs)*DDT rate..

 

24lacs is arrived by dividend amount i.e. Rs.30 lacs* shareholding % i.e. 80%

 

If S ltd holds holds 52% in Gltd... then 52% of dividend declared by G ltd.  will be allowed to be reduced from dividend payment by S ltd.

 

Refer Section 115-O(1A) of the Income Tax Act,1961, DDT payable by G Ltd will be INR 2.5956 Lacs((40-24)*16.2225%). S Ltd will get credit for dividend received from G Ltd if it has been received by the S Ltd in the same year in which S Ltd has declared the dividend


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