Income Tax Act, 2025
Section 5: Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. 102006).
5. Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. 102006).
6. The words “not falling under clause (23G)” omitted by Act 21 of 2006, s. 25 (w.e.f. 12007).
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1[Provided that the provisions of this sub-section shall cease to have effect from the 1st day of June,
2011.]
2[(7) No tax on distributed profits shall be chargeable under this section in respect of any amount
declared, distributed or paid by the specified domestic company by way of dividends (whether interim or
otherwise) to a business trust out of its current income on or after the specified date:
Provided that nothing contained in this sub-section shall apply in respect of any amount declared,
distributed or paid, at any time, by the specified domestic company by way of dividends (whether interim
or otherwise) out of its accumulated profits and current profits up to the specified date.
Explanation.—For the purposes of this sub-section,—
(a) “specified domestic company” means a domestic company in which a business trust has
become the holder of whole of the nominal value of equity share capital of the company (excluding
the equity share capital required to be held mandatorily by any other person in accordance with any
law for the time being in force or any directions of Government or any regulatory authority, or equity
share capital held by any Government or Government body);
(b) “specified date” means the date of acquisition by the business trust of such holding as is
referred to in clause (a).]
3[(8) Notwithstanding anything contained in this section, no tax on distributed profits shall be
chargeable in respect of the total income of a company, being a unit of an International Financial Services
Centre, deriving income solely in convertible foreign exchange, for any assessment year on any amount
declared, distributed or paid by such company, by way of dividends (whether interim or otherwise) on or
after the 1st day of April, 2017, out of its current income, either in the hands of the company or the person
receiving such dividend.
Explanation.—For the purposes of this sub-section,—
(a) “International Financial Services Centre” shall have the same meaning as assigned to it in
clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) “unit” means a unit established in an International Financial Services Centre, on or after the
1st day of April, 2016;
(c) “convertible foreign exchange” means foreign exchange which is for the time being treated
by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign
Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder.]
115P. Interest payable for non-payment of tax by domestic companies.—Where the principal
officer of a domestic company and the company fails to pay the whole or any part of the tax on
distributed profits referred to in sub-section (1) of section 115-O, within the time allowed under subsection (3) of that section, he or it shall be liable to pay simple interest at the rate of 4[one per cent.] for
every month or part thereof on the amount of such tax for the period beginning on the date immediately
after the last date on which such tax was payable and ending with the date on which the tax is actually
paid.
115Q. When company is deemed to be in default.—If any principal officer of a domestic company
and the company does not pay tax on distributed profits in accordance with the provisions of section
115O, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable
by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.
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No tax on distributed profits shall be chargeable under this section in respect of any amount
declared, distributed or paid by the specified domestic company by way of dividends (whether interim or
otherwise) to a business trust out of its current income on or after the specified date:
Provided that nothing contained in this sub-section shall apply in respect of any amount declared,
distributed or paid, at any time, by the specified domestic company by way of dividends (whether interim
or otherwise) out of its accumulated profits and current profits up to the specified date.
Explanation.—For the purposes of this sub-section,—
“specified domestic company” means a domestic company in which a business trust has
become the holder of whole of the nominal value of equity share capital of the company (excluding
the equity share capital required to be held mandatorily by any other person in accordance with any
law for the time being in force or any directions of Government or any regulatory authority, or equity
share capital held by any Government or Government body);
“specified date” means the date of acquisition by the business trust of such holding as is
referred to in clause
Notwithstanding anything contained in this section, no tax on distributed profits shall be
chargeable in respect of the total income of a company, being a unit of an International Financial Services
Centre, deriving income solely in convertible foreign exchange, for any assessment year on any amount
declared, distributed or paid by such company, by way of dividends (whether interim or otherwise) on or
after the 1st day of April, 2017, out of its current income, either in the hands of the company or the person
receiving such dividend.
Explanation.—For the purposes of this sub-section,—
“International Financial Services Centre” shall have the same meaning as assigned to it in
clause
of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
“unit” means a unit established in an International Financial Services Centre, on or after the
1st day of April, 2016;
“convertible foreign exchange” means foreign exchange which is for the time being treated
by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign
Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder.]
115P. Interest payable for non-payment of tax by domestic companies.—Where the principal
officer of a domestic company and the company fails to pay the whole or any part of the tax on
distributed profits referred to in sub-section
of section 115-O, within the time allowed under subsection
of that section, he or it shall be liable to pay simple interest at the rate of 4[one per cent.] for
every month or part thereof on the amount of such tax for the period beginning on the date immediately
after the last date on which such tax was payable and ending with the date on which the tax is actually
paid.
115Q. When company is deemed to be in default.—If any principal officer of a domestic company
and the company does not pay tax on distributed profits in accordance with the provisions of section
115O, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable
by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.
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