Deemed Dividend

Tax Glossary Definition

Deemed Dividend

A deemed dividend refers to specific payments or benefits provided by a company to its shareholders that, although not formally declared as dividends, are treated as such under Section 2(22)(e) of the Income Tax Act. This provision aims to prevent tax avoidance by ensuring that funds distributed to significant shareholders, such as loans or advances, are taxed as dividends when they represent disguised profit distribution.

Example: If a closely held company extends a loan or advance to a major shareholder who holds a substantial interest in the company, that amount may be treated as a deemed dividend for tax purposes

India's Most Trusted
Pro Tax Filer

Discover why we're one of India's most trusted Pro Tax Filers, built on a foundation of accuracy and reliability.

  • We ensure maximum tax benefits.

  • Taxes? Handled by our CAs and experts.

  • Reliable, year-round tax support at no cost.

  • Satisfaction or your money back came twice.

Start Filing

Scan the QR code to Download the app

Mobile App Available on:

DOWNLOAD For IPHONE

TaxFilr App

DOWNLOAD For Android

TaxFilr App

Have Questions? Let’s Talk!

Chat With Us

Scan to chat

Scan QR Code

OR
Start Chat
Mobile Apps Available On
This feature is available on our mobile app. Get the app now to access this feature!

DOWNLOAD For IPHONE

TaxFilr App

DOWNLOAD For Android

TaxFilr App