| Question And Answer | |
|---|---|
| Subject: | Income tax on Dividends received by Non-Residents |
| Category: | Income-Tax |
| Querist: | G.K. Sureka |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Dividend, Non- Resident, non-resident taxation |
| Date: | August 3, 2021 |
From Assessment Year 2021-22, dividends are liable to income tax in the hands of the recipient. In case of residents the dividend received is taxed at the applicable tax slab rate. But it seems that in case of Non-Residents, the dividends received are to be taxed at the flat rate of 20% u/s.115A. The correct position may please be confirmed.
The understanding is correct. As per section 115A of the Income-tax Act, 1961, the tax rate would be 20 per cent plus applicable surcharge and cess.
Further, it would be necessary to check if the Non-resident is entitled to any benefit under the Double tax Avoidance Agreement between India and the Country the taxpayer is a resident of. To avail such benefits, the tax payer would have to file a Tax Residency Certificate and furnish the same along with Form 10F before the tax Authorities