Clause 27 - Amendment of section 115-O

Dividend reduction for distributed profits: allow deduction of subsidiary dividends if tax on those dividends is paid or payable.

Domestic companies may reduce their distributable profit base by dividends received from subsidiaries during the financial year where the domestic subsidiary has paid the tax on that dividend or where the domestic company is liable to pay tax on dividends from a foreign subsidiary, with a proviso to prevent the same dividend being reduced more than once.