MANAGEMENT

Detailed explanation-1: -Thus, if shares are held for trading purposes then the dividend income shall be taxable under the head income from business or profession. Whereas, if shares are held as an investment then income arising in the nature of dividend shall be taxable under the head of income from other sources.

Detailed explanation-2: -An Indian company will deduct tax at a rate of 10% from dividends distributed to resident shareholders if the total amount of dividend distributed or paid to a shareholder during the financial year is more Rs. 5, 000.

Detailed explanation-3: -Royalties received by domestic or resident foreign corporations from a domestic corporation are subject to a final tax of 20%.

Detailed explanation-4: -As per this section, 10% TDS is applicable for dividend income above Rs. 5000 for an individual; this rate will be increased to 20% in the absence of PAN submission by the recipient of dividend income.