Tax on distributed profits of Domestic Companies [Sec. 115-O(1)] - Income Tax - Ready Reckoner - Income Tax

SEC 115-O(1) : TAX ON DISTRIBUTED PROFITS OF DOMESTIC COMPANIES Dividend distribution tax is payable, by domestic company in addition to the Income Tax Any amount declared, distributed or paid by way of dividends (whether interim or otherwise ), whether out of current or accumulated profits shall be charged to additional income tax @ 20.35765% EXCEPTION:- In case of dividend referred to in Section 2 (22) (e) of the Income Tax Act, it has been increased from 15% to 30%(without grossing up). [Inserted by FA 2018 ] Notes: CDT is payable even if no income tax is paid by the company. CDT shall be paid within 14 days from the date of declaration or distribution or payment of any dividend whichever is earliest. Further credit of CDT paid is not available to company or shareholder. CDT is not an allowable deduction under Income Tax Act. Dividend includes deemed dividend under section 2(22)(a), (b), (c) (d) . But does not include dividend under section 2(22)(e) Foreign company is not liable to pay CDT.