Dividends.
95194. 96The principal officer of an Indian company or a company which has made the
prescribed arrangements for the declaration and payment of dividends (including
dividends on preference shares) within India, shall, before making any payment
in cash or before issuing any cheque or warrant in respect of any dividend or
before making any distribution or payment to a shareholder, 97[who is resident in India,] of any dividend
within the meaning of sub-clause (a) or sub-clause (b) or
sub-clause (c) or sub-clause (d) or sub-clause (e) of
clause (22) of section 2, deduct from the
amount of such dividend, income-tax 98[***] at the rates in force :
99[Provided that no such deduction shall be made in the case of a
shareholder, being an individual, if—
(a) the
dividend is paid by the company by an account payee cheque; and
(b) the
amount of such dividend or, as the case may be, the aggregate of the amounts of
such dividend distributed or paid or likely to be distributed or paid during
the financial year by the company to the shareholder, does not exceed 1[two thousand five hundred] rupees:
Provided further that the provisions of this section shall not
apply to such income credited or paid to—
(a) the Life
Insurance Corporation of India established under the Life Insurance Corporation
Act, 1956 (31 of 1956), in respect of any shares owned by it or in which it has
full beneficial interest;
(b) the General
Insurance Corporation of India (hereafter in this proviso referred to as the
Corporation) or to any of the four companies (hereafter in this proviso
referred to as such company), formed by virtue of the schemes framed under
sub-section (1) of section 16 of the General Insurance Business
(Nationalisation) Act, 1972 (57 of 1972), in respect of any shares owned by the
Corporation or such company or in which the Corporation or such company has
full beneficial interest;
(c)
any other
insurer in respect of any shares owned by it or in which it has full beneficial
interest :]
2[Provided also that no such
deduction shall be made in respect of any dividends referred to in section 115-O.]