Prior to today’s session of Budget 2016, dividends received from the companies listed on the stock exchange was not taxed in the hands of the shareholders (Individuals/ HUF/ Resident of India). The taxation was only levied on the dividend paid to a company’s investors. With the widening of this tax to the general population, the government looks to reduce the inequality amongst the tax payers. Effective 1 April, 2016 any dividend income (from equities or bonds) received by an individual or a HUF in excess of Rs. 10 lakhs shall be taxed at a rate of 10%. This is only limited if the dividend income is greater than 10 lakhs. For dividend income below Rs. 10 lakhs there would be no DDT charged in the hands of the receiver. The rule does not cover or talk about non-individual investors which implies that Trusts, Companies (Parent companies that receive dividend income from their subsidiaries) will be excluded from this rule. … (Read On…)
[via Capital Mind]
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