Co. A holds Co. B which in turn holds co. C. Now, Co. B receives dividend from co. C and Co. A receives dividend from Co. B. As per my knowledge Co A's dividend received will be deductible from its dividend payable but what about Co. B? Will it have to pay double Corporate dividend tax????
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dividend tax
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suppose co. c declares rs 100 as dividended...and co,b gets 60 rs and co. a gets 25
now if co. b declareds dividend of rs 150 and co.a receives rs 120. co. b will have to pay cdt/ddt on total rs 150
and in same fy co. a pays rs 200 as dividend ...then he will ay cdt on rs 200-rs 120=rs 80 @ 16.995%
this is becoz the amendment in fa 2008 only provides benefit to ultimate holding co who receives ddt from subsidiary co. on which ddt is paid....who holds more than 50% share (directllllllllllllllllllllllllly) in the subsidiary co.
Thanks Kabir, could anyone also tell me what was the situation before this amendment
before such ammendment there was no relief...every co. had 2 cdt pay on total dividend distribution(except sez -when it distributes dividend out of current profit)
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