Dividend Distribution Tax is one of the biggest concerns and burdens of corporate world in India.question is that, do we see the profit earned by companies as of same nature of income earned by the dividend holders? While analysing the present scenario, if we look at the tax provisions prevailing in India, its corporate tax is quite high as compared to the other countries. One on the main components of corporate tax is Dividend Distribution Tax (DDT). DDT is a tax which is further levied on companies.But the legal question which arises here is not whether the shareholders are getting justified share of their profit but whether taxing the profits of the company twice by the hands of the company, will amount to double taxation?Section 194 of Income Tax Act deals with deduction from shareholders tax and not with deduction on account of company’s own tax, even though it may be taxed on the hands of the company. Bringing up the concept of company having a separate juristic personality than its shareholders makes a distinction between profits earned by the company and income of the shareholders . By saying that the same income cannot be taxed twice is meant that tax is not levied more than once on one passage of the money in the form of one sort of income. Once the profits of a company are transferred to the shareholders it becomes their income and enters a different passage.Also, although when the assessee is a different person direct taxation may be allowed but where the tax is for altogether different purpose or where the double taxation is indirect rather than direct, there is no scope of invalidating taxation. There could be no double taxation if legislature does not enact it.