Question

Question No: 33
A shareholder receives r25 lakhs from the liquidator at the time of liquidation of the company.
A. Not chargeable to tax
B. Entire amount chargeable as business income or capital
gains
C. Chargeable after deducting cost of acquisition of shares
under section 46(2)
D. Under Section 46 (2) chargeable after deducting cost of
acquisition of shares and amount of dividend under section
2(22) (C)​

Answer 1

Answer:

Under Sec 2(22)(c), Distribution of the asset made to the shareholders of the company at the time of its liquidation shall be treated as the deemed dividend to the extent of the accumulated profits of the company immediately before it's liquidation, whether capitalized or not.

TQ