Applicability of surcharge and cess on distribution tax :

Surcharge@12% would be leviable on distribution tax levied under sections 115-O, 115- QA, 115R, 115TA and 115TD. Further, education cess@2% and secondary and higher education cess@1% would be leviable on the distribution tax inclusive of surcharge.

(1)	(2)	(3)	(4)
Section	Particulars	Rate of tax	Effective rate of tax
115-O	Tax on distributed income of domestic companies by way of dividend	15%	17.304%
115QA	Tax on distributed income of domestic company for buy back of shares	20%	23.072%
115R	Tax on distributed income of mutual funds • Distribution by debt funds to individuals and HUFs 25% 28.84% • Distribution by debt funds to other persons 30% 34.608% • Distribution by infrastructure debt funds to non corporate non-residents and foreign companies
115TA	Tax on income distributed by securitization trusts (upto 31.5.2016) • Distribution to persons exempt from tax • Distribution to individuals and HUFs • Distribution to other persons	Nil 25% 30%	Nil 28.84% 34.608%
115TD	Tax on accreted income of certain trusts and institutions	30%	34.608%

 

Note – The dividend and income referred to in section 115-O and 115R, respectively, have to be first grossed up by applying the rates of tax mentioned in column (3) above. Thereafter, the effective rates of tax under section 115-O and 115R mentioned in column (4) above have to be applied on gross dividend/income to compute the additional income-tax payable by domestic companies and mutual funds, respectively, under section 115-O and 115R.