Tax on certain dividends received from foreign companies.

1. (1) Where the total income of an assessee, being an Indian company, 2*** includes any income by way of dividends declared, distributed or paid by a specified foreign company, the income-tax payable shall be the aggregate of—
   • (a) the amount of income-tax calculated on the income by way of such dividends, at the rate of fifteen per cent; and
   • (b) the amount of income-tax with which the assessee would have been chargeable had its total income been reduced by the aforesaid income by way of dividends.
2. (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing its income by way of dividends referred to in sub-section (1).
3. (3) In this section,—
   • (i) “dividends” shall have the same meaning as is given to “dividend” in clause (22) of section 2 but shall not include sub-clause (e) thereof;
   • (ii) “specified foreign company” means a foreign company in which the Indian company holds twenty-six per cent or more in nominal value of the equity share capital of the company.] 3[115BBDA. Tax on certain dividends received from domestic companies.—(1) Notwithstanding anything contained in this Act, where the total income of 4[a specified assessee,] resident in India, includes any income in aggregate exceeding ten lakh rupees, by way of dividends declared, distributed or paid by a domestic company or companies, the income-tax payable shall be the aggregate of—
   • (a) the amount of income-tax calculated on the income by way of such dividends in aggregate exceeding ten lakh rupees, at the rate of ten per cent; and
   • (b) the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income by way of dividends.
4. (2) No deduction in respect of any expenditure or allowance or set off of loss shall be allowed to the assessee under any provision of this Act in computing the income by way of dividends referred to in clause (a) of sub-section (1).
5. (3) In this section, “dividends” shall have the same meaning as is given to “dividend” in clause (22) of section 2 but shall not include sub-clause (e) thereof.] 5[Explanation.—For the purposes of this section,—
   • (a) “dividend” shall have the meaning assigned to it in clause (22) of section 2 but shall not include sub-clause (e) thereof; 2. The words “for the previous year relevant to the assessment year beginning on the 1st day of April, 2012 or beginning on the 1st day of April, 2013 or beginning on the 1st day of April, 2014” omitted by Act 25 of 2014, s. 38 (w.e.f. 1-4-2015).
   • (b) “specified assessee” means a person other than,—
     • (i) a domestic company; or
     • (ii) a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or
     • (iii) a trust or institution registered under section 12A or section 12AA.]

¹ Ins. by Act 8 of 2011, s. 17 (w.e.f. 1-4-2012).

³ Ins. by Act 28 of 2016, s. 52 (w.e.f. 1-4-2017).

⁴ Subs. by Act 7 of 2017, s. 44, for “an assessee, being an individual, a Hindu Undivided Family or a firm” (w.e.f. 1-4-2018).

⁵ Subs. by s. 44, ibid., for the Explanation (w.e.f. 1-4-2018).