Distribution of Debentures, etc. [Sec. 2(22)(b)] - Income Tax - Ready Reckoner - Income Tax

SEC 2(22)(b) : DISTRIBUTION OF DEBENTURES, ETC. DIVIDEND INCLUDES: i.any distribution to its shareholders by a company of debentures, debenture-stock or deposit certificates in any form, whether with or without interest and ii.any distribution to its preference shareholders of shares by way of bonus. to the extent to which the company possesses accumulated profits, whether capitalized or not. NOTE:- The amount shall be deemed as a dividend only to the extent of company s accumulated profit, whether capitalized or not. Such Deemed Dividend shall be chargeable in the hands of the company u/s 115O on which it is required to pay DDT @ 15%. And it will be exempt in the hands of the shareholder.