CAF-2 · Chapter 10 · Question 8 of 15
Mr. A, an individual, received a dividend of Rs. 170,000 (net of 15% tax) from a listed company. No Zakat was deducted. What is his gross taxable dividend income, and what is the final tax liability on this amount?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) Gross dividend Rs. 200,000; Tax Rs. 30,000
Explanation
The gross dividend is calculated by grossing up the net receipt: 170,000 / (1 - 0.15) = 170,000 / 0.85 = Rs. 200,000. The tax rate for individuals on normal dividends is 15%, so the tax liability is Rs. 30,000 (which has already been deducted at source).
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