Bonus shares: In verification of bonus shares, the bonus cannot be issued in lieu of dividend. This will make sec 2(22)(e) irrelevant. Sir Please elaborate it with an example.

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In verification of bonus shares, the bonus cannot be issued in lieu of dividend. This will make sec 2(22)(e) irrelevant. Sir Please elaborate it with an example.

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Ravi Staff September 6, 2017

once dividend is declared, it has to paid in cash, it cannot be settled by issuing shares or giving anything in kind. this is what it intends to say.
now sec 2(22)(e) has very wide application that any payment to shareholders will be deemed income, not going in detail being TAX matter, above statement and interpretation is not from tax point of view

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