Identify the correct statement from the following: A - Neither dividend payments nor realized capital gains...

Identify the correct statement from the following:

A - Neither dividend payments nor realized capital gains are subject to taxes.

B - Realized capital gains are subject to taxes while dividend payments are not.

C - Both dividend payments and realized capital gains are subject to taxes.

D - Dividend payments are subject to taxes while realized capital gains are not.

Solutions

Expert Solution

The correct option is C

Explanation;

Both dividend payments and realized capital gains are subjefct to taxes. As far as taxation laws are concerned, it differs from country to country. Overall both items will be taxed in all countries. While India is concerned, Dividend is taxable when total dividend income is more than Rs 10 lakhs under section 115BBDA of The Income tax Act, 1961. Capital gains are taxable under various heads nby classifying the nature of gain as short term or long term.

In US, the dividend is classified into ordinary and qualified which are taxed accordingly with basic exemption limit. Similar provisions are available across various countries.

jeff jeffy answered 1 year ago

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