If a person receiving amount against capital Reduction after deduction of tax at source u/s 194 (Dividend)
however the person claims that amount as a capital gain and not deemed divided.
please advise in this regard that the amount received is taxable under which head ( Dividend or Capital Gain)!?
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Capital Reduction
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As per section 2(22) of the Income-tax Act, 1961 (Act), any distribution of accumulated profits to the shareholders, whether capitalised or not, pursuant to capital reduction, is considered as dividend.
What Happens if we consider this under section 115QA as Gain!?
Capital gain reduction is not Dividend distribution. Face value of shares go down by reduction in capital.
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