Amended and updated notes on section 115BBDA of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to tax on certain dividends received from domestic companies.
Chapter XII (Sections 110 to 115BBG) of the Income Tax Act 1961 deals with the provisions related to determination of tax in certain special cases. Section 115BBDA of IT Act 1961-2023 provides for tax on certain dividends received from domestic companies.
Recently, we have discussed in detail section 115BBD (Tax on certain dividends received from foreign companies) of IT Act 1961. Today, we learn the provisions of section 115BBDA of Income-tax Act 1961. The amended provision of section 115BBDA is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 115BBDA of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.
Section-115BBDA: Tax on certain dividends received from domestic companies
Section 115BBDA(1) of Income Tax Act
Notwithstanding anything contained in this Act, where the total income of a specified assessee, resident in India, includes any income in aggregate exceeding ten lakh rupees, by way of dividends declared, distributed or paid by a domestic company or companies on or before the 31st day of March, 2020, the income-tax payable shall be the aggregate of—
- (a) the amount of income-tax calculated on the income by way of such dividends in aggregate exceeding ten lakh rupees, at the rate of ten per cent; and
- (b) the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income by way of dividends.
[Sub-section(1) of section 115BBDA has been amended w.e.f. 01.04.2021 by the Finance Act 2020]
Section 115BBDA(2) of Income Tax Act
No deduction in respect of any expenditure or allowance or set off of loss shall be allowed to the assessee under any provision of this Act in computing the income by way of dividends referred to in clause (a) of sub-section (1).
Explanation: For the purposes of this section,—
(a) “dividend” shall have the meaning assigned to it in clause (22) of section 2 but shall not include sub-clause (e) thereof;
(b) “specified assessee” means a person other than,—
- (i) a domestic company; or
- (ii) a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or
- (iii) a trust or institution registered under section 12A or section 12AA.
[Sub-clause (iii) of clause (b) of explanation of section 115BBDA has been amended w.e.f. 01.06.2020 by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020]