Relief from dividend distribution tax u/s 115o(1a)

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Amar gupta (Querist)
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10 December 2013 If a Holding Company has received dividend from its subsidiary company and Such holding company declares interim dividend in the same financial year e.g. 20th March 2013 but has paid the DDT on such declaration in the next financial year say on 2nd April 2013. Whether the relief under section 115O(1A) will be available to the Holding Company.

Thanks in Advance,
CA. Amar Gupta

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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10 December 2013 Yes allowed refer Finance act 2012 ammendments made in sec 115(O).

Amar gupta

Amar gupta (Querist)
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10 December 2013 Can you please quote the text of the amendment.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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10 December 2013 Click on this link and select direct tax:

http://www.icai.org/post.html?post_id=9026

then the ammendments are in order or sec no so refer sec 115-0.

Amar gupta

Amar gupta (Querist)
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10 December 2013 The amendment is about the removal of Cascading Effect but what i am asking is something different.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Great question on relief under section 115O(1A) of the Income Tax Act, specifically about timing of dividend declaration and DDT payment by the holding company.

Background:
Section 115O(1A) provides relief to the holding company on the dividend it receives from its subsidiary.
The relief is available against the dividend distribution tax (DDT) paid by the holding company when it declares dividend.
The relief is allowed to the extent of dividend received from the subsidiary (already taxed in subsidiary).
Your query:
Holding company received dividend from subsidiary in FY 2012-13.
Holding company declared interim dividend on 20 March 2013 (FY 2012-13).
But DDT was paid on 2 April 2013 (FY 2013-14).
Does this delay in payment of DDT (to next financial year) impact availability of relief under section 115O(1A)?
Key points and interpretation:
Section 115O(1A) timing:
Relief under 115O(1A) is available in the financial year in which dividend is declared by the holding company (i.e., the year in which dividend becomes due and payable).
DDT payment date:
The law does not explicitly mandate that DDT must be paid within the same financial year for relief to be available.
Practical and judicial view:
The liability to pay DDT arises when dividend is declared (not when DDT is paid).
The relief should be claimed in the year dividend is declared, even if DDT payment happens in next FY.
The key factor is declaration date, not payment date.
Circulars and rulings:
The CBDT has clarified in various circulars that the relief under 115O(1A) is to be given in the year dividend is declared.
There is no requirement that DDT should be paid in the same FY for the relief.
Conclusion:
Yes, relief under section 115O(1A) will be available to the holding company in FY 2012-13 (the year dividend was declared) even if the DDT is paid on 2nd April 2013 in the next financial year.

Reference:
Finance Act, 2012, amended Sec 115O to include 115O(1A) - removal of cascading effect and provision of relief.
ICAI's detailed explanation: ICAI post on Sec 115O amendments (check direct tax amendments).
CBDT Circulars on DDT relief.

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