TaxTMI 
TaxTMI 
10 Oct 2026 
Abbreviations used:
ITA 1961 or 61 Act - The income-tax Act, 1961
ITA 2025 or 25 Act - The income-tax Act, 2025
ITR 1962 or 62 Rules - Income Tax Rules 1962
ITR 2026 Or Rules 2026- Income-tax rules 2026
PY - Previous year in ITA 1961
AY- Assessment year in ITA 1961.
TY - Tax year in ITA 2025
| Remarks. | ||
| 7. Income deemed to be received and dividend deemed to be income in a tax year. | Income deemed to be received. | S.7 of ITA 2025 contains heading, provisions of S.7 and 8 of ITA 1961. |
| (1) The following incomes shall be deemed to be received in the tax year :-
| 7. The following incomes shall be deemed to be received in the previous year :- | Same except changes in numbering and style and TY vs. PY |
| (a) the annual accretion in that year to the balance at the credit of an employee participating in a recognised provident fund, to the extent provided in paragraph 6 of Part A of Schedule XI; | (i) the annual accretion in the previous year to the balance at the credit of an employee participating in a recognised provident fund, to the extent provided in rule 6 of Part A of the Fourth Schedule ;
| Same except changes in numbering of section and clauses and Schedule and rates to be prescribed in case of ITA 2025. Similar effect. |
| (b) the transferred balance in a recognised provident fund, to the extent provided in paragraph 11(4) and (5) of Part A of Schedule XI;
| (ii) the transferred balance in a recognised provident fund, to the extent provided in sub-rule (4) of rule 11 of Part A of the Fourth Schedule ;
| Same except changes in numbering of section and clauses and Schedule and rates to be prescribed in case of ITA 2025. Similar effect. |
| (c) the contribution made by the Central Government or any other employer in that year to the account of an employee under a pension scheme mentioned in section 124.
| 1[(iii) the contribution made, by the Central Government 2[or any other employer] in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD.]
| Same except changes in numbering of section and clauses. Similar effect. Rates of contributions fixed in ITA 2025 vide S.124 are higher than in S.80CCD of ITA 1961 with some changes about nature of contributors. |
|
| Dividend income. |
|
| (2) For inclusion in the total income of an assessee,- | 8.1[For the purposes of inclusion in the total income of an assessee,- |
|
| (a) any dividend declared by a company or distributed or paid by it within the meaning of section 2(40)(a) to 1[(e)] shall be deemed to be the income of the tax year in which it is so declared, distributed or paid, as the case may be; | (a) any dividend] declared by a company or distributed or paid by it within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2 shall be deemed to be the income of the previous year in which it is so declared, distributed or paid, as the case may be ; |
|
| (b) any interim dividend shall be deemed to be the income of the tax year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it. | 2[(b) any interim dividend shall be deemed to be the income of the previous year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it.]
|
|
There is significant change in style of writing of provisions under two enactment, including for headings and numbering of section, sub-sections and clauses. Though any difference might not have been intended, but while applying rules of interpretations there can be circumstances to distinguish provisions and need of a fresh finality in interpretation of provisions of ITA 2025 and precedence in ITA 1961 may not be binding but may be considered persuasive.
Let us hope that there will be reduced litigation, however, in tax matters more than 90 percent litigation is initiated by tax officers and tax payer has to contest to save his hard earned money from levy of wrongful tax and interest and penalties by tax officers.
The provisions of above sections seems simple, however, we know that there have been litigation in regime of ITA 1961 and it is likely to be more in regime of ITA 2025. One of the reason will be whether any provisions of ITA 2025 is in parametria with provision of ITA 1961.
Regarding deemed income received including dividend un-necessary complexities can be created for petty sums of dividend and other sums which are declared in one year and payable / paid in next year. Sometimes there is delay in realisation due to technical reasons pertaining to KYC of shareholder. If the provisions of deemed dividend is strictly applied, there can be difficulties to small shareholders.
Some of incomes will have only timing difference, by invoking deeming provisions any such income may fall under say first year, and on application of normal accounting and receipt method adopted by assessee some of such income may be includible in second year. Tax effect of such sums will not be significant for revenue, therefore, on such matters litigation by revenue deserved to be avoided. If assessee has considered income in second year, there should not be litigation by revenue to tax it in first year. In this regard, suitable instructions by way of binding circulars are desired.
Rules, forms, notifications, judgments and articles and discussions on related subjects are now easily available in this website under various links provided like contents, Acts, Notifications, Rules, Plus+ etc.