Inter-corporate dividend deduction — Section 148 (old 80M)

How it works

Deduct the dividend received to the extent you distribute your own dividend before the return due date — removing the tax cascade in holding-subsidiary structures.

Example: a holding company receives ₹1 crore dividend and pays out ₹1 crore to its shareholders → the ₹1 crore received is effectively untaxed at the holding level.

Who it helps

Holding companies and group structures moving dividends up the chain.

Timing is everything

• The onward dividend must be declared before the return due date to claim the deduction against the dividend received.
• Match the amounts — you deduct only up to what you redistribute.
• Common in holding-subsidiary groups moving cash up to the ultimate shareholders.