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Is it possible to withdraw reserve from pvt. ltd. co.

Tax planning 1041 views 1 replies

HITESH GORI

CA in practice

148 Points Posted on 28 August 2012

Hi Friends,

If closely held company want to distribute reserve in shareholder, is it possible to withdraw reseve without paying DDT ?

i want to know about the possibility to reduce withhold tax by using any legal way.

I also want to know if company do buyback and again issue shares to shareholders, in this situation any tax liabillity will arise or not ?

any other way like this.

please suggest something. it is urgent.

Replies (1)

CA C.JANANI

partner

270 Points Posted on 29 August 2012

DDT is payable when dividend is paid in whcih case dividend will be exempt in the hands of shareholders. If DDT is not paid , it may amount to deemed dividend and subsequently the same will be attracted in the hands of shareholdres. Regarding buy back pls refer private limted company and unlisted compnay (buy bakc of securities) rules,1999.