Dividend Income

[Nadeem5]

Company deduct 10% with holding tax on dividend paid, but will the individual who will get this dividend will pay tax again on it while filing his return. Please give oridanance number as well.

[smraza]

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Company deduct 10% with holding tax on dividend paid, but will the individual who will get this dividend will pay tax again on it while filing his return. Please give oridanance number as well.
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The dividend income is not double taxed, while filing of return by individual the same income is declared as tax exempted and separate return is filed for that under section 115(4) of the I T ordinance 2001.


SMR

[Ali Akbar]

Dear S M Raza you are very much right in saying that dividend is not double taxed, but this statement is correct with reference to individual only. Dividend income is double taxed with reference to company, because once company itself pays tax on profit @35%/39% and then when the dividend is declared out of that profit then it is again taxed @5%/10%.(Dividend is always/normally declared out of that profit which has already been taxed)

When the individual files return he does not declare the dividend income as tax exempted rather he states that it is chargeable under Presumptive Tax Regime(PTR) and files statement under section 115(4)

[smraza]

the question was specifically for individuals thats i talked about the individual only, anyways, thanx for the addition to my knowledge. <img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle>

SMR