Section 115QA buy-back tax was on:
AFII shareholders only (per relevant Section) (per relevant Section)
BShareholders directly
CStock exchange
DDistributing company at 20% (repealed for shareholders from FY24-25)
Answer & Solution
Correct answer: D. Distributing company at 20% (repealed for shareholders from FY24-25)
1. Section 115QA imposed Distribution Tax at 20% on company for buy-back.
2. Buy-back income exempt in shareholder under 10(34A).
3. Finance (No.2) Act 2024: buy-back receipts taxable as DEEMED DIVIDEND in shareholders' hands; 115QA discontinued for buy-backs on/after 1 Oct 2024.
_Source: ICAI BoS CA Final Paper 7, Ch 9 "Assessment of Various Entities"_
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