NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Equity Products
Under the Income-tax Act as taught for NISM X-B, how is dividend received by a resident individual from a listed Indian company taxed?
Dividend from an Indian company is added to the resident individual's total income and taxed at the investor's slab rate as income from other sources. It is not exempt and is not treated as a capital gain.
- AExempt in the hands of the investor
- BTaxed at 10% flat with no slab rate
- CAdded to income and taxed at the investor's slab rateCorrect
- DTaxed as long-term capital gain
Explanation
Dividends are taxable in the shareholder's hands as income from other sources at the applicable slab rate. The company's earlier dividend distribution tax regime no longer applies. They are not capital gains and not exempt.
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