Section 2(40)(f) in The Income Tax Act, 2025

[Cites 0, Cited by 0] [Section 2(40)] [Section 2] [Entire Act]

Union of India - Subsection

Section 2(40)(f) in The Income Tax Act, 2025

(f)any payment by a company on purchase of its own shares from a shareholder as per section 68 of the Companies Act, 2013,but does not include—

(i)a distribution made under sub-clause (c) or (d) in respect of any share issued for full cash consideration, where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets;

(ii)any advance or loan made to a shareholder or the said concern by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company;

(iii)any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is so set off;

(iv)any distribution of shares pursuant to a demerger by the resulting company to the shareholders of the demerged company (whether or not there is a reduction of capital in the demerged company);

(v)any advance or loan between two group entities, where,––

(A)one of the group entity is a "Finance Company" or a "Finance Unit"; and

(B)the parent entity or principal entity of such group is listed on stock exchange in a country or territory outside India other than the country or territory outside India as specified by the Board in this behalf,where,––

(A)"accumulated profits" for the purposes of––

(I)sub-clauses (a), (b), (d) and (e), shall include all profits of the company up to the date of distribution or payment referred to in those sub- clauses;

(II)sub-clause (c), shall include all profits of the company up to the date of liquidation, but shall not, where the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law in force, include any profits of the company before three successive tax years immediately preceding the tax year in which such acquisition took place;

(B)in respect of an amalgamated company, the accumulated profits, whether capitalised or not, or loss, as the case may be, shall be increased by the accumulated profits, whether capitalised or not, of the amalgamating company on the date of amalgamation;

(C)"concern" means a Hindu undivided family or a firm or an association of persons or a body of individuals or a company;

(D)a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any time during the tax year, beneficially entitled to not less than 20% of the income of such concern;

(E)for the purposes of sub-clause (v),—

(I)"Finance Company" and "Finance Unit" shall have the same meaning as respectively assigned to them in regulation 2(1)(e) and (f) of the International Financial Services Centres Authority (Finance Company) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019, and is set up as a global or regional corporate treasury centre for undertaking treasury activities or treasury services as per the relevant regulations made by the International Financial Services Centres Authority established under section 4 of the said Act;

(II)"group entity", "parent entity" and "principal entity" shall be such entities which satisfy such conditions as may be prescribed in this behalf;

Legal Document View

Unlock Advanced Research with PRISMAI

Union of India - Subsection

Section 2(40)(f) in The Income Tax Act, 2025