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TMI BlogRemoving dividend distribution tax (DDT) and moving to classical system of taxing dividend in the hands of shareholders/unit holders.X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the amount declared, distributed or paid by way of dividend. Such dividend referred to in section 115-O is exempt in the hands of shareholders under clause (34) of section 10. In case of business trust, specific exemption is provided under sub-section (7) of section 115-O, subject to certain conditions. Similarly, exemption is provided for distributed profits of a unit of an International Financial Service Centre, on fulfilment of certain conditions, under sub-section (8) of section 115-O. Similarly under section 115R, specified companies and Mutual Funds are liable to pay additional income-tax at the specified rate on any amount of income distributed by them to its unit holders. Such income is then exempt in the hands of u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 115-O to provide that dividend declared, distributed or paid after 1st April, 2003, but on or before 31st March, 2020 shall be covered under the provision of this section. (ii) amend clause (34) of section 10 to provide that the provision of this clause shall not apply to any income, by way of dividend, received on or after 1st April, 2020. (iii) amend section 115R to provide that the income distributed on or before 31st March, 2020 shall only be covered under the provision of this section. (iv) amend clause (35) of section 10 to provide that the provision of this clause shall not apply to any income, in respect of units, received on or after 1st April, 2020. (v) amend clause (23FC) of section 10 so that all dividen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to only dividend declared, distributed or paid by a domestic company on or before the 31st day of March, 2020. (xii) amend section 57 to provide that no deduction shall be allowed from dividend income, or income in respect of units of mutual fund or specified company, other than deduction on account of interest expense and in any previous year such deduction shall not exceed twenty per cent. of the dividend income or income from units included in the total income for that year without deduction under section 57. (xiii) amend section 194 to include dividend for tax deduction. At the same time the rates of ten per cent. is proposed to be prescribed and threshold is proposed to be increased from ₹ 2,500/- to ₹ 5,000/- f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under this section would arise at that time. (xvi) amend section 195 to delete exemption provided to dividend referred to in section 115-O. (xvii) amend section 196A to revive its applicability on TDS on income in respect of units of a Mutual Fund. It is also proposed to substitute of the Unit Trust of India with from the specified company defined in Explanation to clause (35) of section 10 and in cash or by the issue of a cheque or draft or by any other mode with by any mode . (xviii) amend section 196C to remove exclusion provided to dividend under section 115-O. It is also proposed to substitute in cash or by the issue of a cheque or draft or by any other mode with by any mode . (xix) amend section 196D to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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