Tax Management with reference to -Deemed Dividend-

 

2.4.      [ SEC. 2(22)(c) ] :  DISTRIBUTION TO SHAREHOLDERS ON LIQUIDATION

Any distribution to its shareholders by a company on its liquidation , to the extent to which Distribution is attributable  to the accumulated profits, whether capitalized or not, immediately before its liquidation.
Note :

  1. Computation of Accumulated profits :

    1. The Company which is in Liquidation : Accumulated Profits include all profits of the company upto the date of liquidation.

    2. Where the company is in liquidation due to compulsory acquisition : Accumulated Profits include all profits of he company upto the date of liquidation but it excludes profits of the company prior to the 3 years immediately preceding the PY in which such acquisition took place.

2.         Thus the amount distributed by a company on reduction of its share capital has two components – distribution attributable to accumulated profits and distribution attributable to capital.

2.5.      [ SEC. 2(22)(d) ] :  DISTRIBUTION ON REDUCTION OF CAPITAL

any distribution to its shareholders by a company on the reduction of its capital, to the extent to which the company possesses accumulated pro fits which arose after the end of the previous year ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not;

Note :

>>  Redemption of Preference Shares at premium shall gave rise to Capital Gain and shall not be treated as Deemed Dividend.

 
MORE TOPICS ....
> Tax Management in reference to Location & Nature of New Business
> Tax Management In Nature Of The New Business
> Tax Management with reference to -Deemed Dividend
> [ SEC. 2(22)(a) ] : Tax Management with reference to -Deemed Dividend- ( Any Distribution Entailing Release)
> [ SEC. 2(22)(b) ] : Any Distribution By Way Of Debenture Etc.
> [ SEC. 2(22)(c) ] : DISTRIBUTION TO SHAREHOLDERS ON LIQUIDATION
> [ SEC. 2(22)(e) ] : Payment By Way Of Advance Or Loan To Shareholders
> TAX PLANNING THROUGH ISSUE OF BONUS SHARES
> Tax Management with reference to –Lease or Buy Decisions
> Tax Management with reference to –Repair, Replace, Renewal Or Renovation
> Tax Management with reference to – ‘Make Or Buy’ Decisions
> [Sec.- 46] : Capital Gains on Distribution of Assets by Companies
> Tax Management in reference to-Sale of Scientific Research Asset
  Tax Management with reference to –‘Capital Structure'
> Conversion of Firm / Sole Proprietorship to Company
 
 
 
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