Taxability Of Dividend – Pre & Post Budget Analysis

PREFACE

Hon'ble Finance Minister, in her budget speech had proposed to abolish the much-abhorred dividend distribution tax "DDT" on companies/mutual fund. The Budget proposed a shift to classical system of taxing dividend in the hands of shareholders/unit holders from 1st April, 2020.

After the amendment made by the Finance Act, 2020, now dividends are taxable in the hands of the recipients. It is to be noted that the provisions of section 115-O of Income tax Act, 1961 (the Act) are applicable to the dividends declared, distributed or paid on or before 31st March 2020. Likewise, the provisions of section 115BBDA of the Act are applicable to the dividends declared, distributed or paid on or before 31st March 2020.