Eg. A Pvt. Ltd. earned a profit of Rs. 10 lacs
paid income tax on 10 Lacs @ 30% = 3 lacs
Balance profit after tax= 7 lacs transferred to it's share holders.
Will such share received from company be taxable in the hands of shareholders?
Doubt: Income of 10 lacs already taxed once. Will it be taxed again?
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Tax on share of profit received from the closely held company
Replies (3)
Even though it is paid out of tax paid income, still it is taxable in hands of shareholder since the abolition of dividend distribution tax. Said income were earlier exempted but now taxable.
Regards,
Manoj
But won't it lead to double taxation
It is a double taxation case since company can't claim dividend as allowance expenditure and shareholder on the other hand pays tax on said receipts. But unfortunately that what the law says.
Regards,
Manoj
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