Taxability of dividends received

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Cooperative banks have to pay regular income tax.After such payment they distribute dividend.Such dividend should be tax free in the hands of shareholder.Under the basic provision of double taxation such dividends must be tax free.

AI Summary

Cooperative Bank Dividends Taxable for Shareholders; Not Exempt under Sections 115 O or 10 of Income Tax Act. A discussion on the taxability of dividends received from cooperative banks highlights that such dividends should be tax-free for shareholders to avoid double taxation. However, it is noted that dividends from cooperative banks are not exempt under Section 115 O or Section 10 of the Income Tax Act. These dividends are considered income for shareholders and not covered under certain sections for non-allowability. Cooperative banks can claim dividends as business expenses under Section 37 or Section 28, but disputes may arise, requiring careful presentation before authorities to secure deductions.