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Dividend distribution tax is the tax levied by the Indian Government on companies according to the dividend paid to a company's investors.
As per existing tax provisions, income from dividends is tax free in the hands of the investor. There is a levy of 15% of the dividend declared as distribution tax. This tax is paid out of the profits/reserves of the company declaring the dividend.
The provisions of this Section applies to a domestic company for any assessment year, on an amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise)
The Company is required to pay the Dividend Distribution Tax within 14 days from the date of declaration or distribution or payment of any dividend whichever is earlier.
The said dividend distribution tax is in addition to the income tax chargeable on the total income of the Company and the same shall be payable @15% and the same shall be increased by Surcharge @10%, and such aggregate of tax and surcharge shall be further increased by an Education cess @2% and higher education cess 1% .
The Section applies to dividend payments made either out of current or accumulated profits.
The dividend so paid will be eligible for exemption for the shareholders under Section 10(34).
The Dividend Distribution Tax is payable by a Domestic Company even if no income-tax is payable on its total income.
What else can I help you with?
What is the tax treatment of a dividend to the company?
dividend paid by the company is exempt from tax u/s 115O, but dividend distribution tax should be paid by the company as per Income tax Act before dividend.According to the union budget 2007, the rate is 15%. Equity mutual funds (with more than 65% of assets invested in equities) do not pay a dividend distribution tax, though other funds do. Liquid and Money Market funds pay 25% dividend distribution tax.
What is dividends tax?
Dividend distribution tax is the tax levied by the Indian Government on companies according to the dividend paid to a company's investors. As per existing tax provisions, income from dividends is tax free in the hands of the investor. There is a levy of 15% of the dividend declared as distribution tax. This tax is paid out of the profits/reserves of the company declaring the dividend.  The provisions of this Section applies to a domestic company for any assessment year, on an amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise)  The Company is required to pay the Dividend Distribution Tax within 14 days from the date of declaration or distribution or payment of any dividend whichever is earlier.  The said dividend distribution tax is in addition to the income tax chargeable on the total income of the Company and the same shall be payable @15% and the same shall be increased by Surcharge @10%, and such aggregate of tax and surcharge shall be further increased by an Education cess @2% and higher education cess 1% .  The Section applies to dividend payments made either out of current or accumulated profits.  The dividend so paid will be eligible for exemption for the shareholders under Section 10(34).  The Dividend Distribution Tax is payable by a Domestic Company even if no income-tax is payable on its total income.
Formulla for retained earnings?
retained earnings=profit after tax- dividend distribution
What is a dividend of 164?
Dividend of 164 is the maximum tax on the dividend income that will be effected on 31st December.
What is the dividend tax rate?
The federal tax rate for what are known as "qualifying dividends" is the same as the long term capital gains tax rate. The rate for all other dividends is the same as the ordinary income rate. Mutual funds sometimes issue a dividend known as a "capital gains dividend" or a "capital gains distribution." This is a capital gain passed through from the fund and is treated as a long term capital gain to the shareholder.
Is a termination dividend taxable?
Yes, a termination dividend is generally taxable to the recipient. It is typically considered a distribution of profits or capital gains, depending on the nature of the payment and the recipient's tax situation. Individuals should report it as income on their tax returns, and the specific tax implications may vary based on local tax laws and the recipient's overall financial circumstances. It's advisable to consult a tax professional for personalized guidance.
Is dividend pay on net profit or profit after tax?
Tax is the first priority of payment that's why dividend is paid on income after tax basis which is dividable to shareholders.
What is reserve distribution?
A non-distributable reserve is one which is not available for distribution to shareholders as a dividend.
How do you record dividend declaration and its distribution?
because they do that's why
What is the symbol for Nuveen Tax-Advantaged Dividend Growth Fund in the NYSE?
The symbol for Nuveen Tax-Advantaged Dividend Growth Fund in the NYSE is: JTD.
Why isn't stock dividend distributable a current liability?
Because the dividend is only available for distribution; It has not been declared.
What is the accounting double entry when a company declare or pay dividend to its holding overseas company with 10 percent local withholding tax rate?
Let's say the dividend payable is $110. When the dividend is declared (eg the decision is made to pay a dividend but the dividend and tax won't be paid until, say, the first day of next month) then the entry is: Debit "Dividends Expense" (Expense Account) $110 Credit "Dividend Payable Parent Company" (Liability Account) $100 Credit "Dividend Tax Withheld" (Liability Account) $ 10 When the dividend and Tax is actually paid (eg it is now the first day of next month) the entry is: Debit "Dividend Payable Parent Company" (Liability Account) $100 Debit "Dividend Tax Withheld" (Liability Account) $ 10 Credit "Bank Account" (Asset Account) $110
