Rationalization of taxation of income by way of dividend
(As per Clause 44 of Finance Bill 2017)
Under the existing provisions of section 115BBDA, income by way of dividend in excess of Rs. 10 lakh is chargeable to tax at the rate of 10% on gross basis in case of a resident individual, Hindu undivided family or firm.
With a view to ensure horizontal equity among all categories of tax payers deriving income from dividend, it is proposed to amend section 115BBDA so as to provide that this section shall be applicable to all resident persons other than
i) a domestic company or
ii) a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or
iii) a trust or institution registered under section 12AA of the Income-tax Act.
This amendment will take effect from 1st April, 2018 and will, accordingly apply in relation to the assessment year
2018-19 and subsequent years.
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