FinKnowHub Blog

In the Evening of 19th May, 2023  was travelling to Gurugram. Suddenly, back to back Whatsapp notifications buzzed. Only one message was circulating in all groups, "Rs. 2,000 banned". I quickly checked my wallet to looked for any such denomination with me, but there wasn't. Then I browsed the Internet to check the Truth behind it and went to RBI Website and read the entire Press Release. Through this article I will try to remove the misconceptions and rumours behind the recent development. To keep it easier, a QnA format is used. 1. Why Rs.2,000 denomination Bank Notes were issued ? To fulfil the currency requirement of the Economy in an immediate manner after the sudden decision of withdrawing Rs.500 and Rs.1,000 denominated Bank Notes.  The intent was to de-circulate them once the currency in other denominations gets floated in the economy in adequate quantities, therefore printing of New Rs.2,000 Bank Notes was stopped in 2018-19.  Also the value of Rs.2,000 Bank Notes...

G one are the days when dividend income was considered as an Exempt Income. In the Finance Budget 2020, the liability to pay tax on Dividend was shifted from declaring companies to its recipients.  Following is a brief overview of provision pertaining to Taxability of Dividend prior to April 1, 2020 Prior to April 1, 2020 Dividend (Interim or Final) declared by a Domestic Company was taxed under Section 115-O of Income Tax Act, 1961 at the rate of 15%. This tax was called DIVIDEND DISTRIBUTION TAX. (Section 115-R dealt with the Income distributed by Mutual Funds to its Unit holders) On the other side, the said Dividend Income was treated as an EXEMPT INCOME in the hand of recipient (Investor) . Therefore, the onus to pay tax lied upon the Domestic Company Dividend, not the investor.