Section 57(i) — the law in short
What the courts have decided on section 57(i), 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 — the proviso to s.57: only interest, capped at twenty per cent of the dividend, from AY 2021-22
CBDT Circulars & InstructionsCuts both ways
Dividends are taxable in my hands again. What can I actually deduct against dividend income, and is there a limit?
Only interest expense, and not more than twenty per cent of the dividend income included in your total income for that year computed without this deduction. The proviso to s.57 was inserted by the Finance Act 2020 with effect from 1 April 2021, so it applies from AY 2021-22 onwards; the same amendment substituted the word 'dividends' in clause (i) for 'dividends, other than dividends referred to in section 115-O', which is what brought ordinary dividends back into the shareholder's assessment.
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.