We are 3 friends who are planning to open up a Pvt Limited company.
If the company makes a net profit of 3.00 Cr - not considering salary or remuneration.to us 3 people, my calculation is showing an effective tax outgo of 36.5%
3.00 Cr - Profit
0.75 Cr - 25% Income Tax
---------------
2.25 Cr - Profit After Tax
0.34 Cr - 15% DDT
---------
1.91 Cr - Dividend available for distribution to 3 owners / shareholders
1.91 Cr / 3 Shareholder = 63.75L Each
63.75 L - 10.00 L (tax free dividend in the hands of the receiver) = 53.75 L
10% Tax on dividend above 10L in the hands of the receiver = 10% x 53.75 = 5.37L x 3 shareholders
Net Tax Outflow = 0.75Cr + 0.34Cr + 0.16 Cr = 1.25 Cr (42% of profit)
** This is a high level calculation for the sake of simplicity. I'm not factoring in the number of shareholders required in a PLC or surcharge etc
CAclubindia
