What is dividend distribution tax (DDT)?

It's a tax levied by the Indian Government on companies according to the dividend paid to investors. DDT currently stands at 15% and only applies to domestic companies. Indian companies have to pay the tax even if they aren't liable to pay any tax on their income.

Where have you heard about dividend distribution tax (DDT)?

India's DDT provisions were introduced in the Finance Act 1997. Since Narendra Modi became Indian PM, economic reforms have been high on the country's agenda, and there have been calls in some quarters for DDT to be changed or abolished.

What you need to know about dividend distribution tax (DDT).

Dividends declared by an Indian company are tax free for all shareholders, but the company declaring the dividend is liable to pay DDT on the dividends paid, declared or distributed. Dividends received by an Indian company from a foreign company (holding 26% or more equity share) are also taxable.

Dividend taxes are also levied in many other countries around the world. In some jurisdictions, companies are required to withhold at least the standard tax, paying this to the national revenue authorities and paying out only the balance to shareholders.