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Sec. 40a(2)(b) of income tax

Vinay Garg (Service Tax Expert) (775 Points)

29 September 2013

Hey Guys.

Whether a holding company of its subsidiary, where subsidiary company holds substantial shareholding in assessee company, cover under sec. 40A(2)(b) of income tax?

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4 Replies

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 29 September 2013

Yes, definately this relation is be covered under Sec 40(a)(2)(b)

Vinay Garg (Service Tax Expert) (775 Points)
Replied 29 September 2013

Under which subclause?

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 29 September 2013

Relative’ is defined to include ‘Substantial Interest

Substantial Interest’ is defined as a situation wherein a person is the beneficial owner of at least 20% or more Equity Voting Power (in case of Company) or is entitled to 20% or more of the profits. (in any other case)