Tax on share of profit received from the closely held company

This discussion explores whether profits received by shareholders from a closely held company, after the company has already paid income tax, are subject to further taxation. It highlights that under current regulations, these distributions are taxable in the hands of the shareholders, even though the company's profit has already been taxed. This effectively leads to a double taxation scenario, as the company cannot claim dividend payments as an expense, and the shareholder must pay tax on the received income.