INTERVIEW QUESTIONS TAX DIVIDEND DISTRIBUTION TAX DETAILS

Question: What is difference between Dividend Distribution Tax (DDT) in case of domestic and foreign companies?

Answer: Investors can receive dividends from any of these companies. The taxability for each of these company is as follows.

Domestic Companies:

If the investor has invested in a domestic company then the dividends that are announced by that company are not taxable for investors i.e. investors won’t have to pay any tax on the income they received from the domestic company.

Foreign Companies:

If the investor has invested in a foreign company then the dividends that are announced by that company are taxable i.e., investors have to pay tax on the income they received from the foreign company.

Investors can receive dividends from any of these companies. The taxability for each of these company is as follows.

Domestic Companies:

If the investor has invested in a domestic company then the dividends that are announced by that company are not taxable for investors i.e. investors won’t have to pay any tax on the income they received from the domestic company.

Foreign Companies:

If the investor has invested in a foreign company then the dividends that are announced by that company are taxable i.e., investors have to pay tax on the income they received from the foreign company. Source: CoolInterview.com

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