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Dividends received by a person in the financial year 2019-2020 is exempt under section 10(34) of the act.

Q. I am an ex-serviceman. I had started an educational society. The society had sold a piece of agriculture land and purchased another piece of agricultural land at some other place. However, since I-T section 240-B was not extended to the society, we had to pay a huge sum as tax on capital gains.

On an appeal, it was revised twice.

However, we have paid the tax component in full. We have also appealed to the I-T authorities to waive the interest. The appeal is since pending.

Is it possible to get any relief under Vivad Se Vishwas amnesty scheme?

L. Pandu Ranga Reddy

A. Under the Vivad Se Vishwas Amnesty Scheme, such appeals before the competent authority where there is a dispute on tax, interest and penalty are covered in order to claim relief as per the provisions entailed in the scheme based on which relief is granted by the authorities.

On the basis of the query raised by you, two inferences can be made,

First, there is an application for the waiver of interest for the tax already discharged, thereby indicating that there is no dispute on the interest payable figure, only waiver of the interest payable is being applied before the competent authority under section 201(1A)(i).

This does not amount to an appeal and is only an application before the competent authority for waiver of interest. Such applications are not covered under the Vivad Se Vishwas Amnesty Scheme as per the frequently answered question released by the Central Board of Direct Taxes (CBDT).

Second, since there is a dispute on the calculation of interest levied and the same has been contested on or before January 31, 2020 before a competent appellate authority, you may claim relief under Vivad Se Vishwas Amnesty Scheme even though you are not disputing the tax component as it has been discharged in full.

Q. Is tax payable on dividends on shares and mutual funds from domestic companies for the period April 2019 to March 2020? What is the exempt amount?

S. Ramachandran

A. Dividends received by a person in the financial year 2019-2020 is exempt under section 10(34) of the act.

However, dividends received from domestic companies by individuals, HUFs, firms (other than registered charitable institutions/trusts, domestic companies) in excess of ₹10 lakh in a financial year is charged at 10% under section 115BBDA of the Act (tax is levied only on the excess over ₹10 lakh).

Dividends will be taxed in the hands of the receiver based on their respective tax slabs/tax rates from the financial year 2020-2021 as per the proposal in the Union Budget passed by Parliament.

(The author is partner, GSS Associates, Chartered Accountants, Chennai)

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