What is Dividend Distribution Tax (DDT)

Dividend Distribution Tax (DDT)

About Dividend Distribution Tax (DDT)

What is Dividend Distribution Tax (DDT)

Dividend Distribution Tax (DDT) is a tax levied on dividends distributed by companies out of their profits among their shareholders.
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The Dividend Distribution Tax is taxable at source and is deducted at the time of the distribution. According to the law, DDT is levied at the hands of the firm, and the shareholder. An exception is that when a shareholder receives more than Rs 10 lakh in dividend, they have to pay an additional tax.
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Under the Income Tax Act, any domestic firm which is distributing dividends has to pay DDT at the rate of 15 per cent of the gross amount. At different times, governments of the day have imposed and removed Dividend Distribution Tax according to market needs.
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The Dividend Distribution Tax has to be paid to the government within 14 days of the dividend declaration. If not paid within the stipulated time, it has to be paid with an accumulated interest charged at the rate of 1 per cent per month. The tax is paid separately, over and above the company’s income tax liability.
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Brokers, especially on Indian bourses, have been calling for Dividend Distribution Tax to be scrapped, since it leads to significant taxation of corporate earnings, making markets unattractive.
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Other than DDT, the Securities Transaction Tax (STT) and Long-Term Capital Gains (LTCG) tax are some major taxes levied on market instruments.

Latest Updates on Dividend Distribution Tax (DDT)

Dividend payouts by India Inc nearly double to Rs 44,810 cr in Q1 CY20

1 min read Last Updated :Apr 05 2020 | 6:44 PM IST
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Budget impact: Shares with DVRs underperform after DDT removal

3 min read Last Updated :Feb 13 2020 | 10:35 PM IST
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Effective tax rate to rise for life insurance companies with DDT removal

4 min read Last Updated :Feb 05 2020 | 1:53 AM IST
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Ball is now in your court: FM Sitharaman exhorts India Inc to invest more

3 min read Last Updated :Feb 05 2020 | 1:19 AM IST
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New taxation rules to hit dividends received from foreign subsidiaries

3 min read Last Updated :Feb 04 2020 | 11:14 PM IST
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No longer taxing: DDT removal a step in right direction, says Sebi chief

3 min read Last Updated :Feb 04 2020 | 11:50 PM IST
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DDT abolished: Nearly 60% high dividend yielding shares end in the red

4 min read Last Updated :Feb 04 2020 | 12:37 AM IST
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To boost domestic investment, Sitharaman's Budget focuses on foreign firms

5 min read Last Updated :Feb 03 2020 | 9:57 PM IST
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Budget 2020: Here are a few hits and misses for overseas investors

4 min read Last Updated :Feb 02 2020 | 11:24 PM IST
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Naveen Patnaik critiques Budget 2020, frets over shrinking central tax pool

2 min read Last Updated :Feb 01 2020 | 8:12 PM IST
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Budget 2020: DDT cut comes as a boon for firms, bane for shareholders

3 min read Last Updated :Feb 01 2020 | 11:30 PM IST
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Budget 2020: Govt removes Dividend Distribution Tax on companies

2 min read Last Updated :Feb 01 2020 | 3:24 PM IST
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Shares bought on January 31 cannot be sold on the Budget day. Here's why

3 min read Last Updated :Feb 01 2020 | 8:33 AM IST
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