Income tax on dividends: All you want to know
Live MintBy Rajeshree Sabnavis and Saurabh Shah Shareholders are entitled to the profits of the company and such profit when distributed is termed as ‘dividend’. Further, in 2017, the government decided to tax dividend in the hands of shareholders, who had an annual dividend income in excess of ₹10 lakh. > Resident corporate shareholders shall also have a higher tax outflow as the effective tax rate under section 115BAA of the Income-tax Act, 1961 shall be 25.2% as against DDT of 20.60% under the earstwhile regime. However, now since dividend income is made taxable in the hands of shareholders, interest expenses shall be claimed to the extent of 20% of such dividend income. Under the new classical system of dividend taxation, unit holders shall have to pay tax on dividends if SPV opts the new concessional rate of tax at 25.2%.
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Income Tax Filers Exceed 2.3 Lakh, with High Majority Being Businesspersons and Professionals
Hindustan Times
