Section 148 - Deduction in respect of certain inter-corporate dividends
A domestic company can deduct dividends received from domestic companies, foreign companies or business trusts to the extent it redistributes dividends at least one month before the return due date.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current-law control
This page uses the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026. Earlier years and saved proceedings remain subject to the repeal-and-savings framework.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
A domestic company can deduct dividends received from domestic companies, foreign companies or business trusts to the extent it redistributes dividends at least one month before the return due date.
Who should use this section
Domestic companies receiving qualifying dividends and redistributing dividends within the statutory window This applicability note is specific to section 148.
Old-law bridge
1961 Act section 80M
The bridge is navigational only. A 1961 Act case or rule is carried forward only after checking wording, transition provisions and the current 2025 Act text.
Professional alert
Exception / professional alert Track receipt and redistribution by tax year. A distributed amount cannot support deduction again in another year.
Connected Income-tax Rules, 2026 and Forms
No provision-specific Rule/Form is independently mapped in this tranche. General return, procedure and evidence rules can still apply.
Worked application
A domestic company receives ₹8 crore qualifying dividends and distributes ₹6 crore within the statutory time. The deduction is capped at ₹6 crore.
Evidence / compliance checklist
- Retain dividend-receipt statements by source and tax year (section 148: Deduction in respect of certain inter-corporate dividends).
- Maintain board/bank records evidencing onward dividend distribution and the statutory timing (section 148: Deduction in respect of certain inter-corporate dividends).
- Cap the claim to the lower qualifying amount and prevent reuse of the same distribution in another tax year (section 148: Deduction in respect of certain inter-corporate dividends).
Common mistake
Claiming the full dividend received even where the onward distribution within the statutory window is lower.
Recommended approach
For section 148, fix the governing tax year, identify the operative sub-section for “Deduction in respect of certain inter-corporate dividends”, trace every amount to evidence, apply only verified Rule/Form links, and retain a computation that another reviewer can reproduce from the primary source.
Thresholds, periods and timing checkpoints
- 148. (1) If the gross total income of a domestic company in any tax year includes
- one month before the due date for filing the return of income under section 263(1).
- domestic company, has been allowed under sub-section (1) in any tax year, no
- deduction shall be allowed in respect of such amount in any other tax year.
Judicial / interpretive bridge
No section-specific Supreme Court bridge is included for section 148 unless text-equivalence with the 2025 Act has been checked. Legacy cases should not be transplanted into section 148 merely because the subject is similar.
Related provisions
- Section 263
- Section 147
- Section 149
Current statutory text
Primary-source trail
FAQs
What does section 148 of the Income-tax Act, 2025 cover?
Section 148 covers deduction in respect of certain inter-corporate dividends. The operative result depends on the exact statutory conditions shown on this page and applies from 1 April 2026, subject to transition/savings provisions.
Who should check section 148?
Domestic companies receiving qualifying dividends and redistributing dividends within the statutory window This applicability note is specific to section 148.
Are there specific Rules or Forms for section 148?
No provision-specific Rule/Form independently mapped in this tranche.