after insertion of sec 194 my domestic compant has paid dividend to its shareholder including its elegible employees whose equity share had been issued under ESOS. my question is being an employee dividend income will be taxed under 192 or separetly taxed under section 194.
Shares alone were allotted to them under ESOP basis. But dividend here was paid to all the share holders. There is no Employer and employee relationship for the dividend received by Employee. Along with other shareholders, employees also received. So it should be considered as normal Dividend and comes under 194 but not 192.
CAclubindia
