Sec 80M of the Income Tax Act
Divanshu jindal
Direct & International Tax professional | Simplifying Complex Tax Challenges
Insights of provisions of Sec 80M of the Income Tax Act :
? Eligible Assessee : Domestic company
? Eligible Amount : Dividend income from other domestic company only.
? Such dividend income must be part of your gross total income of Any previous year.(E.g. if you receive dividend of Rs.100 and claim interest expense of Rs.10(Max 20% allowed) against it, deduction will allowed upto Rs.80 only as only 80 become part of your Gross Total Income.
The word “Any previous year” also can rise to an interesting question that whether deduction for undistributed dividend income of earlier years will be allowed in subsequent years?
? Since it is part of deductions under chapter VI ,as per Sec 80A it cannot exceed total income of that previous year(i.e after other deduction like section 80JJAA etc).
? In addition to above deduction of above dividend income shall be upto amount of dividend(Received in previous financial year) further distributed by such company upto one month before the due date of filing of return.
? Interesting now it will be different dates for companies liable to tax audit and others.
? No deduction under Section 80M available if you opt for lower rates of deduction u/s 115BAA/115BAB