Divident Taxation

mathan kumar (accountant) (35 Points)

23 January 2021

Respected Professionals,

I have a question on divident taxabilty..For example a person received dividend in foreign country amount worth 23000.then out of 23000, only 2000 were remitted to india..how to calculate tax on dividend? Thank you

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CA. Sourav Sarkar (Chartered Accountant ) (24573 Points)
Replied 23 January 2021

Dividend received from a foreign company is taxable. It will be charged to tax under the head “income from other sources.”

Dividend received from a 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. For instance, if the taxpayer comes in the 30% tax slab rate, then such dividend will also be taxable at 30% along with cess.

Even in the case of foreign dividend, the investor can claim deduction only for the interest expense restricted to 20% of the gross dividend income.

Kapadia Pravin (17249 Points)
Replied 23 January 2021

Dividend received is taxed at maximum slab rate applicable to an assessee. It is included in total income under income from other sources. Note that whatever taxes deducted from dividend in foreign country is available as relief under DTAA . Tax is on dividend income and sending amount to India is a different aspect altogether.

Dev Prajapati (215 Points)
Replied 23 January 2021

Full amount of dividend i.e. Rs 23000 will be taxed under IFOS... if assessee is Resident .
In other cases only Rs.2000 will be taxed in India under IFOS.

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