Taxation of Dividends

Taxation of Dividends is a comprehensive and analytically rich reference that simplifies every aspect of dividend taxation under the Income Tax Act 1961. Published under the aegis of the Bombay Chartered Accountants’ Society (BCAS), the book traces the full journey of dividend taxation in India—from the classical regime to the Dividend Distribution Tax (DDT) era, and back to shareholder-level taxation post–Finance Act 2020. Built on a rigorous legislative, judicial, and administrative foundation, the book provides full-spectrum coverage of dividend-related provisions such as section 2(22) (including deemed dividends), section 8, section 80M, the erstwhile sections 115-O and 115BBDA, TDS provisions, anti-avoidance rules, DTAA implications, and the latest amendments affecting buybacks. Every topic is explained using case laws, examples, CBDT circulars, and chapter-wise FAQs to give readers conceptual clarity and practical application.

This book is designed as a definitive professional reference for:

• Chartered Accountants, Tax Consultants & Legal Practitioners dealing with dividend taxation, DDT legacy issues, TDS compliance, cross-border dividend withholding, and corporate tax planning
• Corporate Finance Teams, CFOs & Company Secretaries managing dividend declaration, inter-corporate dividends, buybacks, and compliance with sections 80M, 194, 195, and 206AA/206AB
• Wealth Managers, Investment Advisors & Portfolio Analysts who require clarity on the taxability of domestic and foreign dividends, treaty benefits, and characterisation issues
• Students & Academicians seeking a structured, authoritative textbook on dividend taxation backed by landmark judicial precedents and doctrinal interpretations
• Policy Researchers & Think Tanks studying the evolution of India’s dividend tax policy and its alignment with global anti-avoidance frameworks (MLI, PPT, GAAR)

The Present Publication is the 2026 Edition, authored by CA. Divya Jokhakar, commissioned by the BCAS and published by Taxmann. The noteworthy features of the book are as follows:

• [Historical & Policy Evolution] Explains the complete timeline of dividend taxation—1961 to 2025—including the introduction, amendments, and abolition of the DDT regime, and re-emergence of classical taxation from 1-4-2020
• [Deep Dive into Section 2(22)] Provides exhaustive coverage of the inclusive definition of dividends, including:
  • Distributions out of accumulated profits
  • Debentures, bonus shares to preference shareholders
  • Liquidation and capital reduction distributions
  • Deemed dividends under section 2(22)(e) with illustrations, judicial interpretations, exclusions, and grey areas highlighted by courts