TaxTMI 
TaxTMI 
Dividend Tax Payment Assessment year confusion:- Annual Dividend for a Pvt Ltd company will be declared in the AGM on 30.09.2009. for the financial year 2008-2009. Dividend tax has to be paid after that. Now in the income tax challan what should be the assessment year ? should it be 2009-10 or should it be 2010-11. Dividend will be paid for the financial year 2008-2009 but declared in the financial year 2009-10.
Clarification - Dividend Tax Payment Assessment year
31 Jul 2009 
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Dividend tax liability arises in the year of declaration/payment, so the subsequent assessment year must be used.
Tax liability for a dividend arises in the year in which the dividend is declared or paid, so the assessment year to be entered for dividend tax corresponds to the assessment year following the year of declaration/payment. The provision links liability to the declaration/payment event rather than to the specific financial year of the underlying profits, and accumulated profits may be used without affecting the year of liability. (AI Summary)
Tax liability for a dividend arises in the year in which the dividend is declared or paid, so the assessment year to be entered for dividend tax corresponds to the assessment year following the year of declaration/payment. The provision links liability to the declaration/payment event rather than to the specific financial year of the underlying profits, and accumulated profits may be used without affecting the year of liability. (AI Summary)