Return of capital v/s dividends : tax impact

Whether it is distributed from current years profit or from reserves it will be considered as Dividend only.It is exempt in the hand of shareholders and the company is required to pay Dividend Distribution Tax.

thanks - however, the way this is treated in the us/switzerland as being tax exempt, even for the co is that its considered as per the following:

So in effect, the share capital is reduced by the sums and not the reserves (which maybe accumulated profits). Is there a similar no tax impact in India, when a company returns its capital to its shareholders.

As per Sec.115O of IT Act, Domestic Company has to pay tax on distributed profits, if dividend is paid either out of current or accumulated profits, @ 15%, within 14days from the date of declaration/distribution/payment whichever is earlier. DDT is to be paid even if company has no taxable income.

However, undertakings in SEZ are not required to pay any DDT even if they have declared, distributed or paid the dividends on or after 1-4-2005. It is not even taxable in the hands of shareholders. 

thanks - however, seeking clarity on when co distributes part of its capital and not profits/accumulated profits/reserves.

any thoughts on taxation impact for the same - views in switzerland/usa are that since co is returning part of its capital which belongs to shareholders, the same is a tax free distribution for both the co as well as the shareholder.