Deemed dividend
This query is : Resolved
18 July 2013
What is deemed dividend..?
Is there any difference between deemed dividend & dividend issued by indian company..?
What is the Tax Treatment of this deemed dividend..?
Is there any difference between deemed dividend & dividend issued by indian company..?
What is the Tax Treatment of this deemed dividend..?
18 July 2013
yes there is diff bet deemed div and div issued by indian co.
Refer sec 2(22) for details on deemed div.
deemed div is included under income from other sources and taxed accordingly.
Refer sec 2(22) for details on deemed div.
deemed div is included under income from other sources and taxed accordingly.
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18 July 2013
https://www.caclubindia.com/articles/deemed-dividend-section-2-22-e-of-income-tax-act-1961-6121.asp
Check out the details from article from above link.
Check out the details from article from above link.
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18 July 2013
refer sec 2(22)...
18 July 2013
Exact Section is Section 2(22)(e).
Section 2(22)(e) of Income Tax Act 1961:
“any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) [made after the 31st day of May, 1987 , by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern, in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such company on behalf, or for- the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits”
Section 2(22)(e) of Income Tax Act 1961:
“any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) [made after the 31st day of May, 1987 , by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern, in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such company on behalf, or for- the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits”
18 July 2013
sec 2 (22)clause a,b,c,d and e resp are in relation to deemed dividend.
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18 July 2013
Correction. I though in relation to loan advanced. Section 2(22) in entirety is regarding deemed dividend.
For more details the following link of Income Tax website will be very useful--
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2001ITAct/Caselaws2001/casesec2(22).htm
For more details the following link of Income Tax website will be very useful--
http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2001ITAct/Caselaws2001/casesec2(22).htm
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