Receive Daily Updates by Email (Free Subscription)
Domestic Company: Definition and Meaning
Definition of Domestic Company under the Income Tax Act
Domestic company is defined under sub-section 22A of section 2 of the Income Tax Act, 1961.
A Domestic company is an Indian company which has made prescribed arrangements for declaration and payment, within India, of the dividends payable out of its income which is liable to tax under the said act.
(1) Indian company is defined under sub-section 26 of section 2 of the Income Tax Act, 1961.
(2) The dividends as mentioned above also include dividends on preference shares.
Definition of Domestic Company under the Companies Act
The Companies Act, 2013 does not define the term domestic company.
The Prescribed arrangements, as mentioned above, as per Rule 27 of the Income Tax Rules, 1962 means and includes the following:
The share-register for all shareholders shall be maintained at the company's principal place of business within India.
The dividends declared shall be payable within India to all shareholders.
The general meeting (for passing the accounts and for declaring any dividends) shall be held at a place within India.
All Indian companies are domestic companies while all domestic companies may not be considered Indian companies.