Published Paper Details:

Dividend income has been taxed in India since the inception of the Income Tax Act, 1961 under the head other sources. However, taxation of dividend incomes has seen a turmoil due to the manifold amendments over the years. The manner of taxing dividend has also undergone changes. Earlier, it was taxable in the hands of the recipient shareholders and thereby required the companies to deduct tax at source. And then, it required the domestic companies to pay a dividend distribution tax on declaration, distribution or payment of dividends out of its current or accumulated profits to its shareholders. However, currently it has again been made taxable in the hands of recipient shareholders. This shift would have created havoc for the recipient shareholders as well as the companies distributing its profits to its shareholders. This paper makes an attempt to review the tax treatment of dividend income from domestic companies on equity shares in the hands of individual shareholders over period commencing from 1997, when corporate taxation in India witnessed major amendments, till 2020 along with the reasons as stated by the then Honourable Finance Minister in his / her Union Budget Speech.