PART - B
DIVIDEND DISTRIBUTION TAX
CHAPTER - VI
SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME
Tax on dividends distributed
99. (1) Subject to the provisions of this Code, every domestic company shall be liable to dividend distribution tax, at the rate specified in Paragraph B of The Second Schedule and in the manner provided therein, on any amount declared by the company by way of dividends.
(2) The amount referred to in sub-section (1) shall be reduced by,-
(a) the amount of dividend, if any, received by the domestic company during the financial year, if-
(i) such dividend is received from its subsidiary;
(ii) the subsidiary has paid tax under this section on such dividend; and
(iii) the domestic company is not a subsidiary of any other company; and
(b) the amount of dividend, if any paid to-
(i) any pass-thru entity; or
(ii) any person for, or on behalf of, the pass-thru entity.
(3) The same amount of dividend, referred to in clause (a) of sub-section (2), shall not be taken into account for reducing the amount, referred to in sub-section (1), more than once.
(4) The liability to dividend distribution tax shall be discharged by way of self-assessment or any other mode, as the case may be, in accordance with the provisions of this Code
(5) Without prejudice to the foregoing and subject to the provisions of this Code, every domestic company may be charged in respect of its liability to dividend distribution tax referred to in sub-section (1).
(6) The dividend distribution tax charged under the foregoing provisions shall be collected after allowing credit for pre-paid taxes, if any, in accordance with the provisions of this Code.
(7) For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company.
