Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: ACCOUNTING STANDARDS :: empanelment :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: cpt :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: ACCOUNTING STANDARD :: VAT Audit
« Indirect Tax »
 Applicability of TDS provisions of section 194-I of the Income-tax Act, 1961 on lump sum lease premium paid for acquisition of long term lease-regarding
 CBDT seeks monthly data of disposed I-T appeals
 Further indirect tax may be levied in 2017
 India has to make its own tax law
 Centre warns against criticism of GST network
 Indirect tax collection jumps 26% in April-September, direct tax 9%
 Indirect Tax collections up
 Thank you note from income tax department
 Tax dept scanning IDS disclosures filed through post
 Poor management cause of financial pressure on Centre
 GST to have short-lived impact on inflation: RBI

Companies scramble to pay dividend to dodge date with higher tax
September, 25th 2014

Many companies are rushing to pay dividend to shareholders before October 1 when a higher dividend distribution tax (DDT) becomes applicable.

The boards of 118 listed companies have declared dividend since July 10 against 67 companies in the year-ago period. From October 1, the effective DDT rate will be 20.47% — an additional liability of 3.475%.

"Many listed companies and promoters of privately-held companies are taking advantage of the lower tax rate by distributing dividend before September 30," said Avinash Gupta, managing director, Alpen Capital, an investment bank.

Nearly 36 companies have announced final dividend since July 1 while 77 companies have declared interim dividend. TCS, HCL Technologies, Sonata Software, Care Ratings and Mahindra Lifespace Developers are among companies which have declared special dividend.

"This is understandable as the extra liability is quite big," said Kush Katakia, CEO, Beanstalk Advisory. At present, the effective tax rate after levy of surcharge and education cess is 16.995% (15% tax + 10% surcharge + 3% education cess) and the tax is paid by the company before the distribution of dividend paid. The rate was raised by the Modi government in the July Budget.

Companies scramble to pay dividend to dodge date with higher tax

"It make sense for corporates and mutual funds to declare and pay dividend for the financial year 2013-14, including interim dividend of financial year 2014-15, if any, before 1st October, 2014 so as to save tax of 3.475%," said Rajat Aggarwal, partner, RRA Consultants. TCS, India's largest company in terms of market capitalisation, which declared 500% interim and 4000% special dividend in July saved nearly Rs 326 crore in the form of lower DDT outgo.

Similarly, Indiabulls Housing Finance has announced 400% and 450% interim dividend successively in August and September. Care Ratings declared 60% interim dividend on July 31 and 650% special dividend on September 31.

Interestingly, Oracle Financial Services, which declared a dividend of 9,700% (Rs 485 per share) early September, had moved SAT challenging capital market regulator Sebi's ruling that there should be a gap of 30 days between book closure and record date for dividend declaration.

On Tuesday, SAT set aside the Sebi order, allowing the software company to declare interim dividend and fix the record date on September 25. Oracle would save about Rs 142 crore, thanks to the SAT order.

"Effective 1st October, DDT is to be charged on the gross amount and not the net dividend distributed. Hence, DDT shall be calculated on also an amount of divided which is actually never distributed," said Kunal Gandhi, partner, US Gandhi & Co, Chartered Accountants.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions