BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Detailed explanation-1: -The exemption limit for dividend income in India for the financial year 2021-2022 is Rs. 5, 000. This means that any dividends received up to this amount are not taxable. Any dividends received above this limit are subject to income tax at the applicable rate.
Detailed explanation-2: -A company by declaring dividend can distribute all or a a portion of the net profit to its shareholders. Dividend is a return the shareholders earn on the share capital of the company.
Detailed explanation-3: -The effective rate of dividend distribution tax is 17.65% on the amount of dividends. As per section 115O, the applicable tax rate is 15%.
Detailed explanation-4: -A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings).