No Tax on Interest on Savings Bank Account

Over and above deductions under Chapter VI-A of the Income Tax Act, 1961, Finance Act, 2012 has inserted a new section 80TTA to give deduction for Interest earned on Savings Bank Account with Bank, Co-operative Bank and Post office to the extent of Rs. 10,000/-. Benefit of Section 80TTA is available to Individual and HUF.

Bonus Shares - Taxability

Introduction:

Prime motive of long term investors is to earn healthy dividends on their investment regularly. Investee Companies declare dividends in two form i.e. Cash Dividend and Stock Dividend (Bonus shares). Cash dividends are tax free in the hands of investors as Company declaring the dividend pays Dividend Distribution Tax on it. There is less clarity regarding tax implication of stock dividend/bonus shares. In this article, we will discuss the tax treatment of bonus shares: