Section 115BBD — the law in short
What the courts have decided on section 115BBD, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.115-O(1A): the set-off for dividend received from a subsidiary, and the conditions that gate it
CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
My holding company received dividend from its subsidiary and then paid dividend out to its own shareholders. Can I set off the subsidiary's dividend before computing DDT, and what do I have to prove?
Yes, but only on conditions. Section 115-O(1A) reduces the amount charged under sub-section (1) by the dividend received by the domestic company during the financial year from its subsidiary, provided that where the subsidiary is a domestic company the subsidiary has paid the tax payable under s.115-O on that dividend, and where the subsidiary is a foreign company the tax is payable by the domestic company under s.115BBD on it; a proviso forbids the same amount of dividend being taken into account for reduction more than once, and the Explanation defines a subsidiary as a company more than half of whose equity share capital in nominal value is held by the other company.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
