Additional tax on dividends distributed - Income Tax - 616/CBDT

INSTRUCTION NO. 616/CBDT Dated : September 13, 1973 Under the Finance Acts 1964 to 1968 certain domestic companies were liable to pay an additional tax at the rate of 7.5% on that part of the dividends distributed during the previous year which exceeded 10% of the paid up equity share capital of the company as on the first day of the previous year. 2. It has come to the notice of the Board that this additional levy has been charged in many cases in the year in which such excess dividends were declared. The correct legal position is that the additional tax should be imposed in the year in which the excess distribution is actually made. 3. Necessary instructions may kindly be issued to the officers working in the charge on the lines indicated above. A review of the completed assessments may also be undertaken on a top priority basis and the result communicated to the CBDT by 30th September,1973 positively.