Okay, let's break down this "115H" thing in income tax. It's basically a section in India's Income Tax Act that deals with something called " Dividend Distribution Tax."
Imagine a company making a profit. Now, they might decide to share some of that profit with their shareholders in the form of dividends. This is where 115H comes in:
- The company has to pay a special tax on these dividends before they even reach the shareholders.
- This tax is called Dividend Distribution Tax (DDT).
- Section 115H defines how this DDT is calculated and paid.
So, in simple terms:
- A company makes a profit.
- They want to give some of it back to their shareholders (dividends).
- They have to pay a tax on those dividends (DDT) under Section 115H.
- The shareholders then receive the remaining amount of the dividends after the tax is deducted.
Why does this happen?
The idea is to tax the dividends at the company level, making it easier for the government to collect taxes. Instead of taxing the dividends in the hands of each individual shareholder, they tax it once at the company level.
Important Note: This might sound complicated, but the basic idea is that it's a special tax on dividends paid by companies. It's not something you need to worry about if you're just a regular person receiving dividends - the company takes care of paying this tax.
Let me know if you have more questions!