Dividend income

Tax on Dividends
Dividend income
CA. Kavit Vijay

Income Tax on Dividends Income

Prior to the Finance Act, 2020, companies and mutual funds were liable to pay “Dividend Distribution Tax” on dividends declared or distributed. Therefore, Dividend income was exempted in the hands of shareholders. However, Finance Act, 2020 deleted the concept of Dividend Distribution tax and Tax on dividends income will be in the hands of shareholders for all the dividends paid or distributed by a Company on or after 1st April 2020. At par with other provisions of the Income tax Act, Finance Act, 2020 imposed liability to deduct TDS on dividend Income distributed/paid to shareholders. Hence, the Company will have

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All about Dividend Income and Dividend Distribution Tax i.e DDT
Income Tax
CA. Kavit Vijay

All about Dividend Income and Dividend Distribution Tax i.e DDT

Finance Act, 2020 has proposed to eradicate the provisions of DDT for dividend provided on or after 01.04.2020 and therefore, dividend income and income from units will be taxable in hands of recipients.
Domestic Companies and Specified Companies and Mutual Funds will not be liable to pay any DDT from 1st April 2020 onwards.

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