Guidance required on applicability of Sec. 94 (7).

 




 


Hello Seniors & Friends,




 


                 I'll be glad if somone can guide me on the following: 




 


1. applicability of Sec. 94(7) of Income Tax Act;




 


2. the exact meaning of dividend stripping;




 


           And when can section 94(7) of Income Tax Act be invoked?




 


Regards,




 


Shefali.




 


 




 


 

Replies (4)

Section 94 (7) will be invoked, in the case of units or securities, if the same is acquired within a period of three months prior to the record date and the same are sold within a period of three months (in the case of securities) and nine months (in the case of units), provided the dividend or income on the securities or unit are exempt.


Dividend stripping is nothing but acquisition of securities or units within the above said period just to avail the tax free dividend

Thanks a lot for the reply Sir.

Applicability of dividend tax . can the free reserves of a pvt ltd company can be distributed to its share holders every year and if so any tds or income tax is applicable and what is the procedure in the hands of the receipent ie share holder

 

 

Dear sir,

 

 please tell me what is the meaning of dividend stripping with examples

 

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