alleryStart learning →Under the old Indian system, who paid tax on declared dividends?
AThe shareholder only
BThe declaring company
CThe stock exchange
DThe depository
Answer & Solution
Correct answer: B. The declaring company
The company paid corporate dividend tax and the dividend was then exempt for shareholders.
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Related questions
Which limits can restrict how much a firm may distribute as dividend?Why might management avoid changing dividend policy abruptly?Which alternative to cash dividends may a firm choose when surplus cash exists?Which type of shareholder usually prefers earnings to be retained?With no NPV-positive projects and surplus cash, what should management do?Management knowing more than the market is called what?If dividends bear higher tax than gains, raising them does what to value?Per the Modigliani-Miller theorem, dividend policy has what effect on firm value?