Deemed dividend

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Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2012 does deemed dividend as per income tax act applies to listed company also?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 June 2012 No, It applies to only Closely held companies.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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25 June 2012 No section 2(22)(e) is not applicable to Listed Company.

Applicability of section 2(22)(e)--
Applicable to a Closely Held Company i.e., a Company in which the public is not substantially interested.

Company in which public is substantially interested (See Section 2(18)) includes:

a. a company owned by the Government or the RBI or more than forty percent of the shares are owned by Government or the RBI or a corporation owned by the RBI.

b. a company registered under section 25 of the Companies Act, 1956.

c. a company not having share capital and declared by the Board to be such company

d. Mutual Benefit Finance Company – business of acceptance of deposits from members and notified by the Central Government u/s 620 of the Companies Act, 1956.

e. a company, whose more than 50% Equity Shares (not being Preference Shares) held by one or more Co-operative Societies throughout the previous year.

f. a company not being a Private Company as defined in the Companies Act, 1956, whose Equity Shares were listed on the 31 March of the previous year in a Recognised Stock Exchange.

g. a ‘Government Company’ not being a ‘Private Company’ (both terms being defined in the Companies Act, 1956).

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