Corporate Dividend Tax (CDT)

Features of CDT:
(a) CDT is in addition to Income-Tax chargeable in respect of the Total Income of a Domestic
Company. CDT shall be payable even if no Income-Tax is payable by the Domestic Company
on its Total Income.
(b) CDT is chargeable on any amount declared, distributed or paid by such Company by way of
dividends (whether interim or otherwise) on or after 1st June, 1997. The dividends chargeable
to CDT may be out of the Current Profits or Accumulated Profits.
(c) The rate of CDT is as given by the Finance Act for the relevant previous year.
(d) CDT is payable to the credit of the Central Government within 14 days of – (i) declaration of
any dividend; (ii) distribution of any dividend, or (iii) payment of any dividend, whichever is the
earliest.
(e) CDT paid shall be treated as the final payment of tax on the dividends and no further credit
therefor shall be claimed by the Company or by any person in respect of the tax so paid.

Minimum Alternate Tax (MAT)

The accounting treatment of MAT is based on the Guidance Note on Accounting for Taxes on Income, which has been withdrawn (AS - 22 is now applicable). Accordingly, Tax Charge for the period should be determined on the basis of “Tax Effect Accounting Method”. The principles laid down in AS - 22 will apply.