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Budget 2020: Everything about how dividends will be taxed

Budget 2020 has changed the manner in which dividends are to be taxed. How will tax be paid on dividends between group companies and how will insurance companies meet this tax liability?

By Surabhi Upadhyay Feb 3, 2020 2:19:23 PM IST (Published)

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Budget 2020 has changed the manner in which dividends are taxed. How will the tax be paid on dividends between group companies and how will insurance companies meet this tax liability?

Dividends will be taxed in the hands of the recipient and not the company that is declaring a dividend.

Company declaring dividend will withhold tax at the rate of 10 percent while making payout.

Recipient to pay tax on dividend as per applicable slab rate.

Tax credit of 10 percent withholding tax to be available to recipient shareholder.

Dividend tax chain remains same irrespective of direction of flow of dividend.

Dividend tax chain same for dividend from parent to subsidiary and vice versa.

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