how to calculate DDT?

Pls clarify about the calculation of the DDT:

 

Dividend declared is Rs. 5,00,000/-. DDT Rate is 16.995%.

In Girish Ahuja, i found that DDT is calculate as Rs.500000 x (16.995/116.995)..

 

Is it calculated this way or will it simply 500000 x (16.995/100). Pls suppourt ur answer by explanation.!

 

thanks.!!!!!!!!

Replies (2)

It calculated it simply 500000 x (16.995/100) as it is to be charged on the dividend distributed on is not a tax on tax.

Also section 115-O is reproduced for your ready reference.

 

115-O. [(1) Notwithstanding anything contained in any other provision of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2003, whether out of current or accumulated profits shall be charged to additional income-tax (hereafter referred to as tax on distributed profits) at the rate of fifteen per cent.]

The method suggested by Gurish Ahuja Sir is for deemed dividend u/s 2(22) and not for dividend distributed normally

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