Fact-check notes
Last fact-checked: 2026-05-30
Tax caution: AY 2026-27 covers FY 2025-26 and continues under the Income-tax Act, 1961. New Act, new section and new form references should be verified against official utilities before filing.
Use this page as preparation guidance. A professional should verify the active law year, notification, portal utility and source records before filing or taking a tax position.
What this covers
Deemed dividend rules can tax certain company payments, loans or distributions to shareholders even when they are not labelled as dividend.
- Closely held company loans/advances to shareholders can create deemed dividend risk.
- Buyback-related deemed dividend treatment depends on transaction date and law year.
- Shareholding percentage and accumulated profits must be reviewed.
- Company books and shareholder ITR treatment should match.
Who this is for
- Director-shareholder receiving company loan.
- Closely held company making advances.
- Founder reviewing buyback treatment.
- CA reviewing related-party ledger.
Documents and data to verify
- Shareholding pattern.
- Loan/advance ledger.
- Accumulated profits computation.
- Board minutes and repayment records.
Common mistakes to avoid
- Calling it a loan without checking deemed dividend rules.
- No shareholder percentage review.
- Ignoring accumulated profits.
- Mismatch between company and shareholder returns.
How to proceed
- Confirm the applicable financial year, assessment year, taxpayer type, state and portal status before acting.
- Reconcile portal data with books, AIS/Form 26AS, GST returns, contracts, invoices, bank statements and source documents.
- Prepare a written computation, checklist, filing note or response with assumptions clearly stated.
- Download acknowledgements, challans, workings and evidence after filing or submission.
FAQs
Can WorkIndex help with this?
Yes. Post the facts and documents; relevant experts can quote for filing, advisory, reconciliation, registration, appeal support or ongoing compliance.
Is this page final legal advice?
No. Use it to prepare. A professional should verify the active law year, notification, portal utility and records before filing or taking a tax position.
What should I mention while posting?
Mention the year, state, form, deadline, amount involved, documents available, portal status and whether you need filing, correction, advisory or representation.