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Rule 30A of Income Tax Rules 1962: TDS Credit To A Person Other Than Shareholder

Rule 30A : Credit for tax deducted at source to a person other than the shareholder in certain circumstances
(Chapter: VI - Deduction of Tax at Source)

"(1) Subject to the provisions of sub-rule (2), where the dividend on any share is assessable as the income of a person other than the shareholder, any deduction made in accordance with section 194 and paid to the Central Government, shall be deemed to be a payment of tax on behalf of, and the credit in respect thereof shall be given to, such other person in the circumstances specified below, namely :—

(i) where a company has a right to appoint any person or persons, or where any nominee or nominees of the company has or have been appointed, as a director or directors of any other body corporate, and shares owned by such company in such other body corporate, to an amount not exceeding the nominal value of the shares which are required to be held by a director thereof, are registered in the name of any such person or nominee;
(ii) where a company owns any shares in its subsidiary and such shares are registered in the name or names of any nominee or nominees of the company, if and in so far as it is necessary so to do, to ensure that the number of members of the subsidiary is not reduced, where it is a public company, below seven, and where it is a private company, below two ;
(iii) where a corporation established by or under a Central, State or Provincial Act owns any shares in a company and such shares are registered in the name or names of any nominee or nominees of the corporation in the circumstances specified in clause (i) or clause (ii);
(iv) where any person deposits, with any bank, including a co-operative bank or a land mortgage bank, any shares owned by him, for the collection of dividends thereon and such shares are registered in the name of the bank;
(v) where any person deposits with any other person any shares owned by him, by way of security for the repayment of any loan or the performance of any obligation and such shares are held by, or on behalf of, any of the following, namely :—
(a) the Government or the Reserve Bank of India or any body corporate owned by the Government, or the Reserve Bank of India, or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank;
(b) a local authority;
(c) the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or any of its subsidiary banks;
(d) any banking company, including a co-operative bank or a land mortgage bank;
(e) the Industrial Finance Corporation of India, the Industrial Credit and Investment Corporation of India Ltd., the Madras Industrial and Investment Corporation of India Ltd., and the Refinance Corporation for Industry Ltd.;
(f) a State Financial Corporation established under the State Financial Corporations Act, 1951 (63 of 1951);
(g) an Industrial Development Corporation established in India by a State Government;
(h) the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956);
(i) the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);
(vi) where shares are held by a trustee appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise [including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913)] and the dividend thereon is received by the trustee on behalf of, or for the benefit of, any person who is a beneficiary of the trust;
(vii) where the shares owned by a firm are held in the name of any of its partners;
(viii) where the shares owned by a Hindu undivided family are held in the name of the karta or any other adult member of the family;
(ix) where the shares have been sold or otherwise transferred by the registered shareholder and action for registering the transfer in the name of the purchaser or other person has been taken in accordance with the provisions of section 108 of the Companies Act, 1956 (1 of 1956);
(x) where the shares owned by a member of a recognised Stock Exchange in India deposited with the Stock Exchange in accordance with the regulations of the Exchange are registered in the names of the trustees of the Exchange or the bankers of the Exchange.
(2) The credit referred to in sub-rule (1) shall not be given unless the person entitled to such credit furnishes to the Assessing Officer a declaration in Form No. 15B made by him and the shareholder concerned, together with a certificate of deduction of tax at source in Form No. 19."




Extra Notes for Readers:

- Rule 30A was omitted by the Income Tax (24th Amendment) Rules, 2003, w.e.f. 1st Oct 2003


Reference/Source: Check at Income Tax site for latest version of the Rules - link

This page was last updated on 17th October 2016.
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