A private limited company is declaring dividend out of profit of last 2 years. My query is:
1. Is it allowed to declare dividend from accumulated profit.
2. Does the company need to pay any tax on it.
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Tax on dividend by Private Limited
Replies (5)
Quick Summary
Obviously out of accumulated profit
yes you need to pay tax on it.
yes you need to pay tax on it.
1. Yes it is allowed to declare dividend from accumulated profits ( Reserves / P & L credit balance in balance sheet)
2. Tds provisions are applicable for dividend
2. Tds provisions are applicable for dividend
Does the company have to pay any taxes (DDT has been abolished)...Or just need to deduct TDS..
@ just fall
Dividends tax is withheld by the company declaring the dividend on behalf of the shareholder receiving it. In specie dividends are subject to tax in the hands of the company and not the beneficial owner.
Now dividends are taxable in the hands of the investor
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