Dividend income received from domestic companies during the tax year 2026-27 by Mrs. M. Chatterjee, a…
The tax is ₹ 1,72,500. Dividends from domestic companies are taxed in the hands of the shareholder as ordinary income at the normal slab rates. Outside the default regime,…
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Dividend income received from domestic companies during the tax year 2026-27 by Mrs. M. Chatterjee, a resident individual aged 45, is ₹ 12,00,000; she has no other income and incurred no expenses to earn it. She has opted out of the default tax regime. Under the Income-tax Act, 2025, her tax liability on this dividend for the tax year 2026-27 (before surcharge and cess) is
Answer and explanation
Correct answer C
The tax is ₹ 1,72,500. Dividends from domestic companies are taxed in the hands of the shareholder as ordinary income at the normal slab rates. Outside the default regime, for an individual below 60 the tax on ₹ 12,00,000 is 5% of ₹ 2,50,000 (₹ 12,500) + 20% of ₹ 5,00,000 (₹ 1,00,000) + 30% of ₹ 2,00,000 (₹ 60,000) = ₹ 1,72,500, and no rebate is available because her income exceeds ₹ 5,00,000. ₹ 1,79,400 adds the 4% cess, and ₹ 1,20,000 is a flat 10% of the dividend.
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West Bengal SET (WB SET)