Tax on dividend and advance tax

If assessee has only dividend income in excess of Rs 10 lakhs, and has a business loss, can the business loss be set off against dividend income? And will the assessee get basic exemption limit and 80C deduction against the taxable dividend, or, will the assess have to pay 10% tax directly on the dividend in excess of Rs. 10 lakhs?

Also, if the assessee is a senior citizen, will he be required to pay advance tax?

Replies (1)

Tax on certain dividends received from domestic companies.

" 115BBDA. (1) Notwithstanding anything contained in this Act, where the total income of an assessee, being an individual, Hindu undivided family or a firm, resident in India, includes any income in aggregate exceeding ten lakh rupees, by way of dividends declared, distributed or paid by a domestic company or companies, the income-tax payable shall be the aggregate of—

(a)  the amount of income-tax calculated on the income by way of such dividends in aggregate exceeding ten lakh rupees, at the rate of ten per cent; and

(b)  the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income by way of dividends.

(2) No deduction in respect of any expenditure or allowance or set off of loss shall be allowed to the assessee under any provision of this Act in computing the income by way of dividends referred to in clause (a) of sub-section (1).

(3) ............"

I.........As per the section, it clearly specifies that the tax is over and above any other chargeable tax. So,  adjustment of  business loss not allowed, no question of basic exemption limit.

II. As there is business loss (even though Senior Citizen)....... advance tax liability remain intact.

 

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