“DDT”
The decision most relied on for DDT is Sesa Goa Ltd. v. JCIT (117 Taxmann.com 96), cited in 291 judgments on BharatTax.
Leading authorities on DDT
Education cess paid on total income and dividend distribution tax are allowable deductions for income tax purposes.
The provisions of a Double Taxation Avoidance Agreement (DTAA) would prevail over the domestic law rate of Dividend Distribution Tax (DDT) under Section 115-O.
Dividend Distribution Tax (DDT) is a tax on the profits of the domestic company, not on the shareholder. The Supreme Court's decision in Tata Tea Co. Ltd. did not address the precise nature of DDT as a tax on the company versus the shareholder.
Excess Dividend Distribution Tax (DDT) paid by a company is refundable to the assessee, even though Section 115-O(4) states DDT is a final payment.
Dividend Distribution Tax (DDT) under section 115-O is a charge on the company's profits and not on the income in the hands of the shareholder, meaning it does not constitute double taxation and is not subject to Double Taxation Avoidance Agreements (DTAA).
An assessee can challenge tax liability arising from special charging provisions, such as Section 115QA, by filing a separate appeal under Section 246A. Dividend Distribution Tax (DDT), as an additional tax not linked to the computation of total income, must be appealed independently.
Commission paid to a Managing Director for services rendered is eligible for deduction under section 36(1)(ii) of the Income-tax Act, 1961, provided it is paid as per the terms of employment and not merely to avoid Dividend Distribution Tax (DDT).
