08/03/2019
Chargeable income [Sec. 56(2)] :-
By virtue of section 56(2), the following incomes are chargeable to tax under this head, namely, dividends, winnings from lotteries, crossword puzzles, horse races, card games, etc., income from machinery, plant or furniture let on hire and interest on securities (if the same is not taxable as business income under section 28). In some cases, gift is taxable under this head . Besides, interest received on compensation or enhanced compensation is taxable under the head “Income from other sources" in the year in which it is received (applicable from the assessment year 2010-11).
Dividend[Sec. 56(2)(i)] :-
Under section 2(22), the following payments or distributions by a company to its shareholders are deemed as dividends to the extent of accumulated profits of the company
a) any distribution entailing the release of the company’s assets (Sec 2(22)(a)];
b) any distribution of debentures, debenture-stock, deposit certificates and bonus to preference shareholders (Sec 2(22)(b)];
c) distribution on liquidation of the company [Sec 2(22)(c)
d) distribution on reduction Of capital [Sc 2(22)(d) and
e) any payment by way of advance or loan to the following:
a) shareholder(being a person who is beneficial owner of equity shares) holding not less than 10 percent of the voting power;
b) any concern in which such shareholder is a member or a partner and in which he has substantial interest (Sec.2(22)(e).
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