Section 148
Section 148: deduction for inter-corporate dividends
Section 148 is the Income-tax Act, 2025's version of the deduction long known as "80M" - it stops the same dividend income being effectively taxed twice as it passes through a chain of companies, by letting a domestic company deduct dividend income it received and then redistributed onward to its own shareholders.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
How the deduction works
If a domestic company's gross total income includes dividend income from another domestic company, a foreign company, or a business trust, it can deduct the amount of that dividend income up to the amount of dividend it itself distributes to its shareholders at least one month before the due date for filing its return.
In effect: dividend received in, then paid straight back out to shareholders, is not taxed again inside the recipient company - only the amount actually retained (not redistributed) stays in taxable income.
Key condition
Once a deduction has been allowed for an amount of distributed dividend in one tax year, the same amount cannot be used again to claim a deduction in any other tax year.
Frequently asked questions
Is this the deduction people call "80M"?
Yes - the same inter-corporate dividend relief, now numbered Section 148 under the Income-tax Act, 2025.
Does this apply to an individual shareholder?
No - Section 148 applies to a domestic company that itself receives dividends and redistributes them onward, not to an individual investor.
What's the deadline for distributing the dividend to get the deduction?
The dividend must be distributed at least one month before the due date for filing the company's return of income under Section 263(1).
Want this applied to your actual filing, not just explained?
Check your Section 148 dividend deduction with our tax teamLast updated 9 September 2026