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Deemed dividend u/s 2(22)(e)

Ramesh Purbia (P) (107 Points)

10 May 2013

Dear All,

How to pass accounting entries for deemed dividend under section 2(22)(e) in the books of the company?

Please tell the detailed procedure....

Thanks in Advance......

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3 Replies

ANJALI NEGI (Chartered Accountant) (1263 Points)
Replied 10 May 2013

Deemed Dividend is used only for the purpose of Income tax Act,1961. No accounting entry will be passed for the same.

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(Guest)

Anjali is right, there is no concept of deemed dividend under companies act.

Moreover the some deemed dividends under income tax act is not classifed as dividend under compaines act.

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Ramesh Purbia (P) (107 Points)
Replied 10 May 2013

But The principal officer of an ‘Indian Company or a foreign Company which has made
arrangement for payment of dividends in India’ is liable to deduct income tax u/s 194 at the
rate in force, before making any payment of any sum deemed to be dividend u/s 2(22)(e) of
the I. T. Act, 1961.

How TDS will appear in the books ?