Deemed Dividend ? TDS U/s 194B (DT-CA Final)

Hiii..

1) the concept of deemed dividend is that there are certain transaction which have been  covered under section 2(22) of income tax, which are treated as dividend paid by company  to its share holder,its purely a deeming fiction.

2) In real  dividend is a income of share holder and he should pay tax on it but in case of deemed dividend covered under section 2(22)(a) to 2(22)(d) company pay tax on dividend paid, under section 115-O @ 15%.while it is exempt under section 10(34) for share holder.

3) However  in case of section 2(22)(e) which is applicable for closely held company n in this case share holder will be required to pay Tax under section 115-O

Further we can also say that under two situation only share holder is liable to pay tax on dividend that is dividend received from foreign company and deemed dividend under section 2(22)(e).