Oracle Financial Services succeed in saving dividend tax of Rs 142 crores by distributing the dividend before October 1.
As per Section 115-O of income tax act, the company is require to pay tax on dividend at the effective tax rate of 16.995% (15% tax + 10% surcharge + 3% education cess).
According to the Budget presented by finance minister Arun Jaitely, it is proposed that dividend distribution tax will be levied on gross amount instead of amount paid net of taxes and this will lead to increase in Dividend tax by 2.47%.
The above method to calculate the dividend distribution tax will comes into effect from 1st October, 2014. Continue reading