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Taxability of Dividend - FY 16-17

Ramesh V (14 Points)

22 June 2017

I am not clear as there is a bit of confusion regarding taxability of dividend income. I have received 12 lakhs as dividend for the FY 16-17. Please advise whether I have to pay 10% on 12 lakhs or 10% on 2 lakhs i.e in excess of 10 lakhs.

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sawan (no) (56 Points)
Replied 22 June 2017

per cent dividend tax will be payable only on dividend income over and above Rs 10 lakh threshold in a year, according to an amendment to the Finance Bill 2016 approved by Lok Sabha.

Finance Minister Arun Jaitley had brought 21 amendments when he replied to the debate on Finance Bill 2016 in the Lok Sabha on Thursday. The Bill and the amendments were approved, making the culmination of the three-stage budgetary process in Lok Sabha. The Bill will now go to Rajya Sabha.

One of them seeks to "clarify that tax shall be chargeable on dividend income only to the extent it is in excess of Rs 10 lakh in aggregate as received from a domestic company or companies," the narration of the amendments released by the Finance Ministry here today said.

This essentially means, tax payers whose dividend income crosses Rs 10 lakh would now have to pay an additional dividend tax on the excess income besides the dividend distribution tax being paid by the company/companies declaring such dividends.