Deemed dividend
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 June 2012
does deemed dividend as per income tax act applies to listed company also?
CA CS Amit S. Kedia
(Expert)
25 June 2012
No, It applies to only Closely held companies.
25 June 2012
No section 2(22)(e) is not applicable to Listed Company.
Applicability of section 2(22)(e)--
Applicable to a Closely Held Company i.e., a Company in which the public is not substantially interested.
Company in which public is substantially interested (See Section 2(18)) includes:
a. a company owned by the Government or the RBI or more than forty percent of the shares are owned by Government or the RBI or a corporation owned by the RBI.
b. a company registered under section 25 of the Companies Act, 1956.
c. a company not having share capital and declared by the Board to be such company
d. Mutual Benefit Finance Company – business of acceptance of deposits from members and notified by the Central Government u/s 620 of the Companies Act, 1956.
e. a company, whose more than 50% Equity Shares (not being Preference Shares) held by one or more Co-operative Societies throughout the previous year.
f. a company not being a Private Company as defined in the Companies Act, 1956, whose Equity Shares were listed on the 31 March of the previous year in a Recognised Stock Exchange.
g. a ‘Government Company’ not being a ‘Private Company’ (both terms being defined in the Companies Act, 1956).
Applicability of section 2(22)(e)--
Applicable to a Closely Held Company i.e., a Company in which the public is not substantially interested.
Company in which public is substantially interested (See Section 2(18)) includes:
a. a company owned by the Government or the RBI or more than forty percent of the shares are owned by Government or the RBI or a corporation owned by the RBI.
b. a company registered under section 25 of the Companies Act, 1956.
c. a company not having share capital and declared by the Board to be such company
d. Mutual Benefit Finance Company – business of acceptance of deposits from members and notified by the Central Government u/s 620 of the Companies Act, 1956.
e. a company, whose more than 50% Equity Shares (not being Preference Shares) held by one or more Co-operative Societies throughout the previous year.
f. a company not being a Private Company as defined in the Companies Act, 1956, whose Equity Shares were listed on the 31 March of the previous year in a Recognised Stock Exchange.
g. a ‘Government Company’ not being a ‘Private Company’ (both terms being defined in the Companies Act, 1956).
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