1(1) Notwithstanding anything contained in any other provision of this Act, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount of distributed income by the company on buyback of shares (not being shares listed on a recognised stock exchange) from a shareholder shall be charged to tax and such company shall be liable to pay additional income-tax at the rate of twenty per cent on the distributed income.
Explanation.-For the purposes of this section,-
(i) "buy-back" means purchase by a company of its own shares in accordance with
the provisions of 2 any law for the time being in force relating to companies;
(ii) "distributed income" means the consideration paid by the company on buy-back of shares as reduced by 3 the amount, which was received by the company for issue of such shares, determined in the manner as may be prescribed.
(2) Notwithstanding that no income-tax is payable by a domestic company on its total income computed in accordance with the provisions of this Act, the tax on the distributed income under subsection (1) shall be payable by such company.
(3) The principal officer of the domestic company and the company shall be liable to pay the tax to the credit of the Central Government within fourteen days from the date of payment of any consideration to the shareholder on buy-back of shares referred to in sub-section (1).
(4) The tax on the distributed income
by the company shall be treated as the final payment of tax in respect of the
said income and no further credit therefor shall be claimed by the company or by
any other person in respect of the amount of tax so paid.
(5) No deduction under any other provision of this Act shall be allowed to the
company or a shareholder in respect of the income which has been charged to tax
under sub-section (1) or the tax thereon.
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1. Ins. by Act 17 of 2013, s. 31 (w.e.f. 1-6-2013). 2. Subs. by Act 28 of 2016, s. 58, for "section 77A of the Companies Act, 1956 (1 of1956)" (w.e.f. 1-6-2016). 3. Subs. by s. 58, ibid., for "the amount, which was received by the company for issue of such shares, determined in the manner as may be prescribed" (1-6-2016).
Section 115JG Conversion of an Indian branch of foreign company into subsidiary Indian company
Section 115JH Foreign company said to be resident in India
Section 115O Tax on distributed profits of domestic companies
Section 115P Interest payable for non-payment of tax by domestic companies
Section 115Q When company is deemed to be in default
Section 115QA Tax on distributed income to shareholders
Section 115QB Interest payable for non-payment of tax by company
Section 115QC When company is deemed to be assessee in default