Deemed dividend treatment covers debentures, bonus shares and similar distributions limited to accumulated profits. Distribution of debentures, debenture-stock or deposit certificates to shareholders, and bonus shares to preference shareholders, is treated as dividend only to the extent of the company's accumulated profits, whether capitalised or not. The deemed dividend is limited to the amount of accumulated profits. The note further states that it is chargeable in the hands of the company under the dividend distribution tax provisions, while the corresponding amount is exempt in the hands of the shareholder.