Lower rate of tax on dividends received from foreign companies

Section 115BBD of Income Tax Act (the Act) provides for taxation of gross dividends received by an Indian company from a specified foreign company (in which it has shareholding of 26% or more) at the rate of 15% if such dividend is included in the total income for the Financial Year 2011-12 i.e. Assessment Year 2012-13.

The  above provision was introduced as an incentive for attracting repatriation of income earned by  residents from investments made abroad with certain conditions to check the misuse of the incentive.

In order to continue these provisions for one more year, it is proposed to amend section 115BBD to extend the applicability of  this  section  in  respect  of  income  by  way  of  certain  foreign  dividends   received   in  Financial  Year 2012-13 also, subject to the same conditions.

This amendment will take effect from 1st  April, 2013 and shall apply to the Assessment year 2013-14.

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Category : Income Tax (26530)
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Tags : Budget (1936)

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