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Dividend Distribution Tax
Consider the following statements with reference to the Dividend Distribution Tax(DDT):
- The Dividend Distribution Tax is a tax levied on dividends that a company pays to its shareholders out of its profits.
- Under Section 115-O, the Income Tax Act, any domestic firm which is declaring or distributing dividend has to pay DDT at the rate of 15 percent on the gross amount of dividend.
- The tax has to be paid to the government within 24 days of the dividend declaration, distribution or payment whichever is earliest.
Which of the statement(s) given above is/are correct?
A |
Only 1
|
|
B |
1 and 2
|
|
C |
1 and 3
|
|
D |
Only 3
|
Your Ans is
Right ans is B
Your Answer Is Correct
Your Answer Is Wrong
Explanation :
- The Dividend Distribution Tax(DDT) is a tax levied ondividends that a company pays to its shareholders out of its profits.
- DDT is taxable at source and is deducted at the time of the company distributing dividends. The dividend is the part of profits that the company shares with its shareholders.
- Under Section 115-O, the Income Tax Act, any domestic firm which is declaring or distributing dividend has to pay DDT at the rate of 15 percent on the gross amount of dividend.
- The tax has to be paid to the government within 14 days of the dividend declaration, distribution or payment whichever is earliest.
- If DDT is not paid within the given time period, interest at a rate of 1 percent per month or part thereof starts getting accumulated till the amount is paid. The tax is paid separately, over and above the company’s income tax liability.
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