Tax Management with reference to -Deemed Dividend-( Any Distribution By Way Of Debenture Etc.)
2.3. [ SEC. 2(22)(b) ] : ANY DISTRIBUTION BY WAY OF DEBENTURE ETC.
1. Any distribution to its shareholders by a company of
2. Debenture, Debentures-Stock or Deposit Certificates in any form, whether with or without interest, to equity shareholders or preference shareholders ; and
3. Any distribution of Bonus Shares to its Preference Shareholders.
4. to the extent to which the company possesses accumulated profits, whether capitalize or not. Note :
In above case the distribution need not entail release of assets of the company as it is required u/s 2(22)(a).
And this section is vary specific to define what is dividend like distribution of debenture to shareholders to the extent of accumulated profits shall be treated as Dividend.
It may be seen that issue of Bonus Shares to Preference Shareholders is treated as Dividend u/s 2(22)(b). But this is not so in case of issue of Bonus shares to equity shareholders either in Sec. 2(22)(a) or (b).
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications