A private company planned to redemption of its preference shares issued at premium. Face false of shares Rs. 10/- each. Issued at premium Rs. 5/ each.
The board of directors recommended to redeem at premium of Rs. 10/- each.
As per the income tax act distribution tax should be remitted for the extent of the amount paid to its shareholders more thane received from shareholders.
In the above given situation to how much extent have to paid distribution tax, either Rs. 5/- or 10/-.