Section 7 — Income deemed to be received and dividend deemed to be income in a tax year
Old Act equivalent: 8 of IT Act 1961 Sub-part: Chapter II—Basis of Charge
Statutory Text
- and dividend deemed to be income in a tax year.
- (1) The following incomes shall be deemed to be received in the tax year:—
(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;
(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;
(c) the contribution made by the Central Government or any other employ er in that year to the account of an employee under a pension scheme mentioned in section 124. (2) For 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 [(e)] shall be deemed to be the income
- Substituted for “(f)” by the Finance Act, 2026, w.e.f. 1-4-2026. of the tax 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. Income on receipt of capital asset or stock-in-trade by specified person from
Provisos
None.
Explanations
None.
Tables
None.
Key Structure
- Applies to: Employees (employer contributions to provident/superannuation funds); shareholders (deemed dividend from closely held companies).
- Conditions: Employer’s contribution to recognised PF/approved superannuation fund taxed in hands of employee; deemed dividend from loans/advances by closely held companies.
- Time limits: Tax year in which contribution/advance made.
- Monetary limits: Deemed dividend: accumulated profits of company; transferred balance exemptions.
- Exceptions: Transferred balances between recognised PFs; substantial interest and related persons defined.
Cross-References
Amendment Notes
Substituted for “(f)” by the Finance Act, 2026, w.e.f. 1-4-2026.