Section 8 of Income Tax Act 1961: Dividend Income
Section 8 of the Income Tax Act, 1961 determines the previous year in which specified dividend income is included in an assessee's total income. It covers dividends falling within section 2(22)(a) to (e) and separately states the timing rule for interim dividends.
What does Section 8 provide?
Section 8 is a timing provision. It identifies the previous year in which dividend covered by the section is treated as income for inclusion in total income. The nature of amounts treated as "dividend" is linked to the definition in section 2(22) of the Income Tax Act, 1961.
Section 8 - Dividend income
For inclusion in the total income of an assessee, a dividend declared, distributed or paid by a company within section 2(22)(a), (b), (c), (d) or (e) is treated as income of the previous year in which it is declared, distributed or paid, as applicable.
An interim dividend is treated as income of the previous year in which the amount is unconditionally made available by the company to the member entitled to receive it.
Meaning of the rule in simple terms
- Final or other covered dividend: the relevant previous year depends on when the dividend is declared, distributed or paid, according to the particular type of dividend covered by section 2(22).
- Interim dividend: the relevant previous year is the year in which the company makes the amount unconditionally available to the entitled member.
- Section 8 does not itself define every kind of dividend: it operates with the definition of "dividend" in section 2(22).
Section 2(22) and deemed dividend
Section 2(22) contains the statutory definition of "dividend" for the purposes of the 1961 Act and includes specified distributions and payments that may be treated as dividend even though they may not be described as an ordinary dividend. Section 8 expressly refers to clauses (a) to (e) of section 2(22) when fixing the previous year of inclusion.
| Type of amount | Timing under Section 8 of the 1961 Act |
|---|---|
| Dividend within section 2(22)(a) to (e) | Previous year in which it is declared, distributed or paid, as the case may be. |
| Interim dividend | Previous year in which it is unconditionally made available by the company to the entitled member. |
Current position after 1 April 2026
The Income-tax Act, 2025 replaced the 1961 Act for Tax Year 2026-27 onward. The new law uses the expression "tax year" instead of the earlier "previous year" and "assessment year" framework. Section 7 of the 2025 Act deals with income deemed to be received and dividend deemed to be income in a tax year.
This distinction matters when reading older section-based material. Section 8 of the 1961 Act remains relevant to earlier years and proceedings governed by that Act, while transactions and compliance from 1 April 2026 must be considered under the Income-tax Act, 2025 and the applicable Finance Act, Rules, notifications and circulars.
Dividend reporting and tax compliance
Dividend income can form part of income reported under the applicable return provisions. The precise tax treatment, rate, deduction at source requirement, relief and return form depend on the taxpayer, the payer, residential status, the relevant tax year and other provisions. For payments or credits on or after 1 April 2026, withholding obligations are governed by the Income-tax Act, 2025 rather than the old TDS section numbers under the 1961 Act.
Official legal resources
For authoritative text and current compliance material, refer to the India Code and the Income Tax Department e-Filing portal. Readers dealing with a specific tax year should check the Act applicable to that year together with subsequent amendments, Rules, notifications and circulars.
Related provisions
Section 8 forms part of the provisions dealing with the basis of charge under the 1961 Act. You may also read sections 6 and 7 on residence and income deemed to be received and section 9 on income deemed to accrue or arise in India.
Updated: 27 September 2026. This article explains the statutory rule and the transition between the Income Tax Act, 1961 and the Income-tax Act, 2025. It is general legal and tax information and should be read with the law applicable to the relevant period.