Dividend Distribution Tax

Dividend V. Buyback – Which is more beneficial?

Income Tax - Many a times, profitable companies end up in a situation of generating more cash than they can reasonably reinvest in their business at attractive returns on capital. As cash holdings on a company’s balance sheet increases, there is increased pressure from shareholders to return some of this excess cash to them. There are two ways [&hel...

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Declaration & Tax Treatment of Interim Dividend

Income Tax - As per Section- 2(35) ‘dividend includes interim dividend’ signifies that the provisions of Companies Act 2013, applicable to the final dividend to the extent possible, shall also applicable on interim dividend. As the word “interim” means “relating to less than a full year’s business activity” so the dividend de...

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Income Tax on Dividends- FAQs

Income Tax - FOR RESIDENT SHAREHOLDERS: When valid PAN is available in the records of the Company: Tax deduction rate on Dividend – 7.5%# When valid PAN is not available in the records of the Company: Tax deduction rate on Deividend- 20% #The tax rate has been reduced from 10% to 7.5% with effect from 14 May 2020 […]...

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Dividend Distribution Tax- Reinstate to Shareholders

Income Tax - The shift in the dividend distribution tax (DDT) in the hands of shareholders hailed a big relief for corporates and non-resident. This article primarily focuses on, how (DDT) is taxed as per new amendments by the Finance Act, 2020. It also aims to show, the impact of (DDT) in the hands of shareholders i.e. whether […]...

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Tax on Income Distributed By Way of Buy-Back of Shares By Unlisted Companies- Anti Abuse Provision

Income Tax - Tax on Income Distributed By Way of Buy-Back of Shares By Unlisted Companies- Anti Abuse Provision Dear Friends, payment of taxes is the duty of every citizen of this country. The Governments utilises taxes paid by us into different types of economic and socio works. Non payment or avoidance of taxes shall be punishable monetarily [&helli...

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ITAT grants stay on demands of Rs. 3786 Cr on account of DDT

Grasim Industries Limited Vs DCIT (ITAT Mumbai) - Grasim Industries Limited Vs DCIT (ITAT Mumbai) By way of this stay application, the assessee applicant has sought a stay on collection/ recovery of tax and interest demands aggregating to Rs 3,786.34 crores in respect of the dividend distribution tax (DDT), and interest thereon, under section 115...

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Tax rates specified in DTAA in respect of dividend must prevail over DDT

Giesecke & Devrient [India] Pvt Ltd. Vs Add. CIT (ITAT Delhi) - Giesecke & Devrient [India] Pvt Ltd. Vs ACIT (ITAT Delhi) To recapitulate, the DDT is levy on the dividend distributed by the payer company, being an additional tax is covered by the definition of ‘Tax’ as defined u/s 2(43) of the Act which is covered by the charging section 4 of the Act and...

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No Dividend Distribution Tax to be paid on Dividend declared pursuant to amalgamation of companies

Torrent Private Limited Vs. CIT (Gujarat High Court) - Whether the dividend declared by the company after the effective date of amalgamation but before the date of sanction by the High Court would cease to be dividend declared by the company?...

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Recent Posts in "Dividend Distribution Tax"

ITAT grants stay on demands of Rs. 3786 Cr on account of DDT

Grasim Industries Limited Vs DCIT (ITAT Mumbai)

Grasim Industries Limited Vs DCIT (ITAT Mumbai) By way of this stay application, the assessee applicant has sought a stay on collection/ recovery of tax and interest demands aggregating to Rs 3,786.34 crores in respect of the dividend distribution tax (DDT), and interest thereon, under section 115O/115Q r.w.s. 2(22)(a) of the Income Tax...

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Dividend V. Buyback – Which is more beneficial?

Many a times, profitable companies end up in a situation of generating more cash than they can reasonably reinvest in their business at attractive returns on capital. As cash holdings on a company’s balance sheet increases, there is increased pressure from shareholders to return some of this excess cash to them. There are two ways [&hel...

Read More
Posted Under: Income Tax |

Declaration & Tax Treatment of Interim Dividend

As per Section- 2(35) ‘dividend includes interim dividend’ signifies that the provisions of Companies Act 2013, applicable to the final dividend to the extent possible, shall also applicable on interim dividend. As the word “interim” means “relating to less than a full year’s business activity” so the dividend de...

Read More
Posted Under: Income Tax |

Income Tax on Dividends- FAQs

FOR RESIDENT SHAREHOLDERS: When valid PAN is available in the records of the Company: Tax deduction rate on Dividend – 7.5%# When valid PAN is not available in the records of the Company: Tax deduction rate on Deividend- 20% #The tax rate has been reduced from 10% to 7.5% with effect from 14 May 2020 […]...

Read More
Posted Under: Income Tax |

Tax rates specified in DTAA in respect of dividend must prevail over DDT

Giesecke & Devrient [India] Pvt Ltd. Vs Add. CIT (ITAT Delhi)

Giesecke & Devrient [India] Pvt Ltd. Vs ACIT (ITAT Delhi) To recapitulate, the DDT is levy on the dividend distributed by the payer company, being an additional tax is covered by the definition of ‘Tax’ as defined u/s 2(43) of the Act which is covered by the charging section 4 of the Act and charging […]...

Read More

Dividend Distribution Tax- Reinstate to Shareholders

The shift in the dividend distribution tax (DDT) in the hands of shareholders hailed a big relief for corporates and non-resident. This article primarily focuses on, how (DDT) is taxed as per new amendments by the Finance Act, 2020. It also aims to show, the impact of (DDT) in the hands of shareholders i.e. whether […]...

Read More
Posted Under: Income Tax |

Tax on Income Distributed By Way of Buy-Back of Shares By Unlisted Companies- Anti Abuse Provision

Tax on Income Distributed By Way of Buy-Back of Shares By Unlisted Companies- Anti Abuse Provision Dear Friends, payment of taxes is the duty of every citizen of this country. The Governments utilises taxes paid by us into different types of economic and socio works. Non payment or avoidance of taxes shall be punishable monetarily [&helli...

Read More
Posted Under: Income Tax |

New Dividend Distribution Tax Regime in India| Part 1: Indian Tax Payer

Indian Finance Act 2020 has abolished Dividend Distribution Tax and, with effect from April 1, 2020, dividends declared by Indian companies would be taxable in the hands of shareholders. Replacing the concept of distribution taxes in the hands of the Indian company that was introduced in India in 1997....

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Posted Under: Income Tax |

Farewell To Dividend Distribution Tax – Double Edged Reform

One major change that came with the Finance Act is removal of dividend distribution tax making section 10(34), 10(35), 115-O, 115R(2) and 115BBDA of the ITA inapplicable with effect from April 1, 2020. ...

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Posted Under: Income Tax |

Taxability of Dividend under new tax regime

A. Existing Provisions relating to dividend taxation: (i) Tax implication in the hands of company: Under the existing laws, even though dividend constituted income in the hands of the shareholders, the tax on such dividend was payable by the company which declared dividend, @ 15% of the gross dividend under section 115-O (plus surcharge a...

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Posted Under: Income Tax |

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