Dividend Distribution Tax - Isn't it Double Taxation?

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  1. Reddi.M

    Reddi.M New Member

    friends,
    Companies generally distribute their profits as dividends. on that companies have to pay Dividend Disrtribution tax. Generally these dividends are distributed out of ( after tax profits ). So already company paid income tax, Again why should they pay Dividend Disrtribution tax ? As it seems like Double taxation?
     
  2. I agree with this.

    This is double taxation in the hands of the company.

    However, this is also tax free in the hands of the shareholders.

    If Dividend Distribution Tax had not been there, tax would have been levied in the hands of the shareholders.

    So the tax which was to be paid by the shareholders is now being paid by the company.
     
  3. Reddi.M

    Reddi.M New Member

    [email protected]
     
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