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What is Tax on distributed profits of domestic companies? Section 115 O of Income Tax Act 1961

Tax on distributed profits of domestic companies is defined under sections 115 O of Income Tax Act 1961. Provisions under this Section is :

Section 115 O of Income Tax Act "Tax on distributed profits of domestic companies"

Section 115-O. (1) Notwithstanding anything contained in any other provision of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2003, whether out of current or accumulated profits shall be charged to additional income-tax (hereafter referred to as tax on distributed profits) at the rate of fifteen per cent.

(1A) The amount referred to in sub-section (1) shall be reduced by,-
(i) the amount of dividend, if any, received by the domestic company during the financial year, if such dividend is received from its subsidiary and,-

(a) where such subsidiary is a domestic company, the subsidiary has paid the tax which is payable under this section on such dividend; or
(b) where such subsidiary is a foreign company, the tax is payable by the domestic company under section 115BBD on such dividend:
Provided that the same amount of dividend shall not be taken into account for reduction more than once;]

(ii) the amount of dividend, if any, paid to any person for, or on behalf of, the New Pension System Trust referred to in clause (44) of section 10.

Explanation.-For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company, holds more than half in nominal value of the equity share capital of the company.

 

[(1B) For the purposes of determining the tax on distributed profits payable in accordance with this section, any amount by way of dividends referred to in sub-section (1) as reduced by the amount referred to in sub-section (1A) [hereafter referred to as net distributed profits], shall be increased to such amount as would, after reduction of the tax on such increased amount at the rate specified in sub-section (1), be equal to the net distributed profits.]

(2) Notwithstanding that no income-tax is payable by a domestic company on its total income computed in accordance with the provisions of this Act, the tax on distributed profits under sub-section (1) shall be payable by such company.
(3) The principal officer of the domestic company and the company shall be liable to pay the tax on distributed profits to the credit of the Central Government within fourteen days from the date of-
(a) declaration of any dividend; or
(b) distribution of any dividend; or
(c) payment of any dividend,
whichever is earliest.
(4) The tax on distributed profits so paid by the company shall be treated as the final payment of tax in respect of the amount declared, distributed or paid as dividends and no further credit therefor shall be claimed by the company or by any other person in respect of the amount of tax so paid.
(5) No deduction under any other provision of this Act shall be allowed to the company or a shareholder in respect of the amount which has been charged to tax under sub-section (1) or the tax thereon.
(6) Notwithstanding anything contained in this section, no tax on distributed profits shall be chargeable in respect of the total income of an undertaking or enterprise engaged in developing or developing and operating or developing, operating and maintaining a Special Economic Zone for any assessment year on any amount declared, distributed or paid by such Developer or enterprise, by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2005 out of its current income either in the hands of the Developer or enterprise or the person receiving such dividend :
Provided that the provisions of this sub-section shall cease to have effect from the 1st day of June, 2011.

   
 

Income Tax Act 1961

What is Tax in the case of block assessment of search cases? What is the meaning of Chapter not to apply if the assessee so chooses? Section 113 and 115 i of Income Tax Act 1961

What is Tax on distributed profits of domestic companies? Section 115 O of Income Tax Act 1961

What is Tax on dividends, royalty and technical service fees in the case of foreign companies? Section 115A of Income Tax Act 1961

What is Tax on income from units purchased in foreign currency or capital gains arising from their transfer? Section 115AB of Income Tax Act 1961

What is Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer? Section 115AC of Income Tax Act 1961

What is Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer? Section 115ACA of Income Tax Act 1961

What is Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer? Section 115AD of Income Tax Act 1961

What is Tax on profits and gains of life insurance business? What is Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever? Section 115B and 115BB of Income Tax Act 1961

What is Tax on non-resident sportsmen or sports associations? What is Tax on income from units of an open-ended equity oriented fund of the Unit Trust of India or of Mutual Funds? Section 115BBA and 115BBB of Income Tax Act 1961

What is Tax on non-resident sportsmen or sports associations? What is Tax on income from units of an open-ended equity oriented fund of the Unit Trust of India or of Mutual Funds? Section 115BBA and 115BBB of Income Tax Act 1961

What is the meaning of Anonymous donations to be taxed in certain cases? What is Tax on certain dividends received from foreign companies? Section 115BBC and 115BBD of Income Tax Act 1961

What is Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D? Section 115BBE of Income Tax Act 1961

 

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