Section 115QA of Income Tax Act "Tax on distributed income to shareholders"
115QA. (1) Notwithstanding anything contained in any
other provision of this Act, in addition to the income-tax
chargeable in respect of the total income of a domestic
company for any assessment year, any amount of distributed
income by the company on buy-back of shares 92[***] from a
shareholder shall be charged to tax and such company shall
be liable to pay additional income-tax at the rate of twenty
per cent on the distributed income:
93[Provided that the provisions of this sub-section shall
not apply to such buy-back of shares (being the shares
listed on a recognised stock exchange), in respect of which
public announcement has been made on or before the 5th day
of July, 2019 in accordance with the provisions of the
Securities and Exchange Board of India (Buy-back of
Securities) Regulations, 2018 made under the Securities and
Exchange Board of India Act, 1992 (15 of 1992).]
Explanation.—For the purposes of this section,—
(i) "buy-back" means purchase by a company of its own shares
in accordance with the provisions of any law for the time
being in force relating to companies;
(ii) "distributed income" means the consideration paid by
the company on buy-back of shares as reduced by the amount,
which was received by the company for issue of such shares,
determined in the manner as may be prescribed.
(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 the distributed
income 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 to the credit of the
Central Government within fourteen days from the date of
payment of any consideration to the shareholder on buy-back
of shares referred to in sub-section (1).
(4) The tax on the distributed income by the company shall
be treated as the final payment of tax in respect of the
said income 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
income which has been charged to tax under sub-section (1)
or the tax thereon.
115QB. Where the principal officer of the domestic company and the company fails to pay the whole or any part of the tax on the distributed income referred to in sub-section (1) of section 115QA, within the time allowed under sub-section (3) of that section, he or it shall be liable to pay simple interest at the rate of one per cent for every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.