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CMA Intermediate · Direct and Indirect Taxation · Filing of Return of Income

A new manufacturing co-operative society has validly opted under section 204 for concessional rates. It distributes dividend to its members and wants the deduction under section 149(2)(d)(ii) to be available under section 204(5). The due date for its return under section 263(1) is 31 October. By when must the dividend be distributed at the latest?

The dividend must be distributed on or before 30 September. Section 204(5) allows the deduction only for dividend distributed at least one month before the return due date under section 263(1), and one month before 31 October is 30 September.

  1. AOn or before 30 SeptemberCorrect
  2. BOn or before 30 November
  3. COn or before 31 October
  4. DOn or before 31 March of the tax year

Explanation

Section 204(5) requires the dividend to be distributed at least one month before the due date for filing under section 263(1). One month before 31 October is 30 September. The 31 October option ignores the one-month gap, and 30 November falls after the due date.

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