24 July 2012
The dividend so declared by the domestic company shall be exempt from tax in the hands of shareholders u/s 10(34) of the Income Tax Act, 1961. But this provision is not applicable to foreign company and deemed dividend.
24 July 2012
A Domestic Company means an Indian Company or any other company with respect to its income, liable to tax under the Income-Tax Act, has made the prescribed arrangements for the declaration and payment within India, of the dividends (including dividends on preference shares) payable out of such income.
Thus, all Indian Company are treated as Domestic Company but all Domestic Company are not Indian Company.
If a Foreign Company makes prescribed arrangements for payment of dividends in India it shall be treated as Domestic Company.....
CAclubindia
