Franked Income
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abhishek15512
Franked income also know as franked dividend. FI is that type of income that has already been taxed. The basic idea behind FI is to prevent double taxation of corporate earnings. So, if individual A has received franked income from company X, individual A doesn’t have to pay #tax on dividend because company X has already paid tax. There is a tax system called imputed that ensures that there is no disadvantage experienced by the shareholder when a company distributes profits.
Without such a system, the company would pay corporation tax on its #profits and in addition the shareholders would pay income tax on the dividends. Effectively, tax will be paid twice. This would discourage shareholders as well as company.
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