MANAGEMENT

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: -As per Rule 3, the conditions for declaration of dividend in the event of inadequacy or absence of profits in any year are as follows: (1) The rate of dividend declared shall not exceed the average of the rates at which dividend was declared by it in the three years immediately preceding that year.