dividend distribution

The Budget 2009-10 has introduced the provisions regarding taxation aspect of the newly introduced form of business Limited Liability Partnership. As per the Budget 2009-10 a limited liability partnership (LLP) will be taxed on the same lines as partnership firms — this would mean taxation of profit in the hands of the entity; the partners will be exempted. Full Article

A company incorporated outside India is entitled to become partner in LLP. The LLP Act also provides that a “Foreign Limited Liability Partnership” can also establish a place of business in India.A careful study of the LLP Act will reveal that an LLP enjoys the beneficial features of incorporated bodies without having the disadvantages of [...] Full Article

The long awaited Direct Tax Code Bill 2009 (‘Code’) was finally unveiled by the Finance Minister on August 12, 2009. The Code seeks to bring all direct taxes under one code and pave way for a single unified tax reporting system. The Finance Minister has indicated that the Code has been drafted on a clean [...] Full Article

The finance ministry is considering a proposal to extend the tax exemption on inter-corporate dividends further down the chain of corporate subsidiaries in the upcoming Union Budget, a long-standing demand from India Inc. “The proposal is under consideration but a final decision has not been taken,” said a senior government official. The move is expected [...] Full Article

Closely-held group companies that frequently borrow money from each other should make a mental note of a recent ruling by the income tax appellate tribunal (ITAT), a quasi-judicial tax authority. The tribunal has said that “deemed dividend cannot be taxed in the hands of non-shareholders. ” In order to avoid paying dividend distribution tax (DDT) [...] Full Article

23. Relief in respect of tax on distributed profits of domestic companies 23.1 Provisions of sub-section (1) of section 115-O provide for levy of tax on distributed profits of a domestic company at the rate of fifteen per cent in addition to the income tax payable on its taxable profits. Where a parent company receives [...] Full Article

22. Clarification regarding add back of ‘deferred tax’, ‘dividend distribution tax’, etc. for calculating book profit under section 115JB 22.1 Section 115JB of the Income-tax Act provides for levy of minimum alternate tax (MAT) on the basis of book profits of a company. As per the Explanation after sub-section (2), the expression “book profit” means [...] Full Article

The Securities Transaction Tax (STT) was introduced into the income-tax code by the Finance (No. 2) Act, 2004, taking effect from April 1, 2005. It was expected to give a major boost to both the income-tax department in terms of revenue and the equity market. When STT was paid on share transactions, no liability for long-term capital gains tax arose. Short-term capital gains were taxed at 10 per cent if STT was paid. This was the position till March 31, 2008. Full Article