Dividend

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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Taxability of Dividend under new tax regime

Income Tax - 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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Section 10(34) & 10(38) exemption on dividend & LTCG of VCU earned by SARA Fund

Japan International Co-operation Agency (JICA) Vs ACIT (Intl. Taxation) (ITAT Delhi) - Japan International Co-operation Agency (JICA) Vs ACIT (ITAT Delhi) A.O. as well as Ld. CIT(A) have taken a wrong view by holding that the assessee cannot grow tax-free income u/ss 10(34) and 10(35) of the Acts unless additional tax has been paid as per the provisions of Sections 115-0 and 115-R of ...

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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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Recent Posts in "Dividend"

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 |

Section 10(34) & 10(38) exemption on dividend & LTCG of VCU earned by SARA Fund

Japan International Co-operation Agency (JICA) Vs ACIT (Intl. Taxation) (ITAT Delhi)

Japan International Co-operation Agency (JICA) Vs ACIT (ITAT Delhi) A.O. as well as Ld. CIT(A) have taken a wrong view by holding that the assessee cannot grow tax-free income u/ss 10(34) and 10(35) of the Acts unless additional tax has been paid as per the provisions of Sections 115-0 and 115-R of the Act and […]...

Read More

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 |

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...

Read More
Posted Under: Income Tax |

Is dividend out of reserves possible?

Yes, prima facie, it is possible for a company to pay dividend out of reserves. In advance India, majority of the people are investing in the shares of those companies which are regularly paying dividends. Everybody, who invests expect a healthy return from such investment. The large companies which are regularly paying dividends are beco...

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Posted Under: Income Tax |

New Regime for Taxation of Dividend Income in Context of Resident Individuals

If you have invested in the Shares and earning the dividend Income from the domestic companies then this article will going to be really informative to you as there is some changes made by the Budget 2020 in respect of Taxing the Dividend Income received from Domestic Companies. In this article, we only discussed the […]...

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Posted Under: Income Tax |

Taxability of Dividend under Income Tax Act

1. What is Dividend ? – As an investor when you invest in an entity, you expect something in return on the value of investment. The amount invested in an entity is used by the entity to expand and grow their business and earn more profits. The profits earned by the entity is distributed to […]...

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Posted Under: Income Tax |

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