Quick Summary
The Ministry of Finance is expected to amend the draft Income Tax Bill, 2025, to reinstate Section 80M benefits for companies opting for the 22% concessional tax regime under Section 115BAA. The change aims to ensure fair taxation and eliminate the cascading tax burden on inter-corporate dividends. According to a senior finance ministry official, "This appears to be an inadvertent omission in the new Income Tax Bill. We will address and rectify it, as taxing the same income twice goes against e
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FAQ :
The Finance Ministry is expected to amend the draft Income Tax Bill 2025 to reinstate Section 80M for companies opting for the 22% concessional tax regime.
Section 80M allows companies to deduct dividend income received from another domestic company if they redistribute it to their own shareholders, thus avoiding double taxation.
The draft bill excluded Section 80M for companies opting for the 22% tax rate, while retaining it for other tax regimes, potentially leading to double taxation of dividend income.
According to a senior finance ministry official, the omission of Section 80M for the 22% tax regime in the draft bill appears to have been an inadvertent oversight.
The draft Bill is currently under review by a Parliamentary Select Committee, which is expected to submit its recommendations soon.
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