Income Tax Act, 2025
Section 1: Ins. by Act 7 of 2017, s. 76 (w.e.f. 12018).
1. Ins. by Act 7 of 2017, s. 76 (w.e.f. 12018).
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Explanation 2.—The expression “distributable income of any previous year” shall mean 1[the total
income (as computed before making any deduction under Chapter VIA) assessed for that year] as reduced
by—
(i) the amount of tax payable by the company in respect of 2[its total income];
(ii) the amount of any other tax levied under any law for the time being in force on the company
by the Government or by a local authority in excess of the amount, if any, which has been allowed in
computing the total income;
3[(iii) any sum with reference to which a deduction is allowable to the company under the
provisions of section 80G; and]
(iv) in the case of a banking company, the amount actually transferred to a reserve fund under
section 17 of the Banking Companies Act, 1949 (10 of 1949),
and as increased by—
(a) any profits and gains or receipts of the company, not included in its 4[total income
(as computed before making any deduction under Chapter VIA)]; and
(b) any amountattributable to any allowance made in computing the profits and gains of the
company for purposes of assessment, which the company has not taken into account in its profit and
loss account.
5[236A. Relief to certain charitable institutions or funds in respect of certain dividends.—(1)
6[Where seventy-five per cent of the share capital of any company is throughout the previous year
beneficially held by an institution or fund established in India for a charitable purpose the income from
dividend whereof is exempt under section 11], credit shall be given to the institution or fund against the
tax, if any, payable by it, of a sum calculated in accordance with the provisions of sub-section (2), in
respect of its income from dividends (other than dividends on preference shares) declared or distributed
during the previous year relevant to any assessment year beginning on or after the 7[1st day of April,
1966] 8[by such company], and where the amount of credit so calculated exceeds the tax, if any, payable
by the said institution or fund, the excess shall be refunded.
9[(2) The amount to be given as credit under sub-section (1) shall be a sum which bears to the amount
of the tax payable by the company under the provisions of the annual Finance Act with reference to the
relevant amount of distributions of dividends by it the same proportion as the amount of the dividends
(other than dividends on preference shares) received by the institution or fund from the company bears to
the total amount of dividends (other than dividends on preference shares) declared or distributed by the
company during the previous year.
1. Subs. by Act 20 of 1967, s. 33 and the Third Schedule for “the total income assessed for that year” (w.e.f. 11967).
2. Subs. by s. 33 and the Third Schedule, ibid., for “the said total income” (w.e.f. 11968).
the amount of tax payable by the company in respect of 2[its total income];
the amount of any other tax levied under any law for the time being in force on the company
by the Government or by a local authority in excess of the amount, if any, which has been allowed in
computing the total income;
3[
any sum with reference to which a deduction is allowable to the company under the
provisions of section 80G; and]
in the case of a banking company, the amount actually transferred to a reserve fund under
section 17 of the Banking Companies Act, 1949 (10 of 1949),
and as increased by—
any profits and gains or receipts of the company, not included in its 4[total income
(as computed before making any deduction under Chapter VIA)]; and
any amountattributable to any allowance made in computing the profits and gains of the
company for purposes of assessment, which the company has not taken into account in its profit and
loss account.
5[236A. Relief to certain charitable institutions or funds in respect of certain dividends.—
6[Where seventy-five per cent of the share capital of any company is throughout the previous year
beneficially held by an institution or fund established in India for a charitable purpose the income from
dividend whereof is exempt under section 11], credit shall be given to the institution or fund against the
tax, if any, payable by it, of a sum calculated in accordance with the provisions of sub-section
The amount to be given as credit under sub-section
shall be a sum which bears to the amount
of the tax payable by the company under the provisions of the annual Finance Act with reference to the
relevant amount of distributions of dividends by it the same proportion as the amount of the dividends
(other than dividends on preference shares) received by the institution or fund from the company bears to
the total amount of dividends (other than dividends on preference shares) declared or distributed by the
company during the previous year.
1. Subs. by Act 20 of 1967, s. 33 and the Third Schedule for “the total income assessed for that year” (w.e.f. 11967).
2. Subs. by s. 33 and the Third Schedule, ibid., for “the said total income” (w.e.f. 11968).