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Section 40A2 of Income Tax Act 1961

This query is : Resolved 
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(Querist)
13 August 2010 Dear All,

As per section 40A 2 of Income Tax Act Substantial Interest is Defined as anyone who Holds more than 20% of Voting Rights (in case of Company).
I wanted to know whether this limit of 20% given is Individually or collectively.
For eg: if a Company is paying any amount to someone who is not relative of Director but is holding 15% voting rights and also paying some other person who is holding 12% voting rights. Is the section attracted in this case...?

Thanks in advance
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
13 August 2010 Substantial interest is to be viewed individually. So in the cited example, since each persons interest is being less than 20%, 40A(2) will not attract.
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