Concept of Dividends Deemed dividends CS executive Professional Programme Tax Notes
Concept of Dividends Deemed dividends CS executive Professional Programme Tax Notes 1. Dividend: dividend means amount paid to or received by a shareholder in proportion to his shareholding in a company out of total sum so distributed. 2. Deemed Dividends [section 2(22)] : The following distributions by a company to its shareholders are included in “dividend” – d) Any distribution on the reduction of capital, to the extent to which the company possesses accumulated profits, whether capitalized or not. Dividend excludes: Distribution in respect of any share issued for full cash consideration, where the holder thereof is not entitled to participate in the surplus assets in the event of liquidation. e) Any payment made by way of advance or loan made by a closely held company i.e. a company in which the public are not substantially interested, to the following , is treated as dividend – (A) To a shareholder: such shareholder must be beneficial owner
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