Special attention to the companies having undistributed dividend income
As per the transitional provisions published on 01st April 2018,
In case of any dividend paid by any company prior to April 01, 2019, out of any such dividend received by that company from any other company on which tax had been deducted prior to April 01, 2018 in accordance with the provisions of the Inland Revenue Act, No. 10 of 2006, such dividend shall not be subject to tax under the provisions of the Inland Revenue Act, No. 24 of 2017.
Accordingly, if a company has any undistributed dividend income which was earned before April 1,2018, and if they are redistributed on or before March 31,2019, no withholding tax will apply on such dividend. If the redistribition happens on or after April 01, 2019, 14% withholding tax should be deducted on such dividend.
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