GX Ltd. is a foreign company having business operations in India. The company has made prescribed arrangements for declaration and payment of dividends within India and paid preference share divided of ₹880 lakh for fina

As per the provision of Section 2(22A) of the Income tax Act, 1961, in case of a foreign company, which has made prescribed arrangement for declaration and payment of dividends within India, the same will be treated as domestic company. Therefore, in the above case, GX Ltd. the foreign company, will be treated as a domestic company and would be liable to pay dividend distribution tax. The dividend distribution tax shall be deposited within 14 days of the declaration / distribution or payment of dividends whichever is earlier. The deduction for the payment of dividend distribution tax shall not be allowed as deduction under the provision of Income tax Act, 1961.