Deduction in respect of certain Inter Corporate Dividend - Section 80M - Income Tax - Ready Reckoner - Income Tax

Deduction in respect of certain Inter Corporate Dividend - Section 80M Eligible Assessee: The provision applies exclusively to a domestic company, . Eligible Income: The deduction is available for income by way of dividends received from: Another domestic company A foreign company A business trust The inclusion of foreign companies and business trusts widens the scope of relief, recognizing the increasing cross-border and trust-based investments by Indian corporates. Quantum of Deduction: The deduction is limited to the lower of: The amount of dividend income received, and The amount of dividend distributed by the company on or before the due date. This ensures that only the portion of dividend income which is actually passed on to shareholders is eligible for deduction, thereby preventing abuse of the provision. Due Date: The due date is defined as one month prior to the date for furnishing the return of income u/s 139(1). This effectively incentivizes prompt distribution of dividends if deduction is to be claimed. One-time Deduction: Sub-section (2) prohibits double deduction in respect of the same dividend amount in another previous year, reinforcing the principle of once only relief.