Section 2. Definitions

2. Definitions.— In this Act, unless the context otherwise requires, — (a) "Companies Act," means the Companies Act, 1956 (1 of 1956); (b) "company" means an Indian company as defined in[2] [clause (26) of section 2 of the Income-tax Act, 1961 (43 of 1961) and includes a company referred to in sub-clause (ii) of clause (17)] of the said section which has made arrangements for the declaration and payment of dividends within Indian in accordance with the rules made under the said Act; Income-tax Act, 1961 (43 of 1961) and includes a company referred to in sub-clause (ii) of (c) "preference share" means a share which[3] * carries, as respects dividends, a preferential right to be paid a fixed amount or an amount calculated at a fixed rate; (d) "previous year" has the same meaning as in the[4] [Income-tax Act, 1961 (43 of 1961)]; (e) "stipulated dividend", in relation to a preference share, means the fixed amount or the amount calculated at fixed rate which the holder of such share has a preferential right to be paid as dividend; (f) all other word and expressions used but not defined in this Act and defined in the Companies Act shall have the meanings respectively assigned to them in that Act. 2. In section 4A, for the words, brackets, letters and figures "twenty-seven and a half per cent. of the aggregate of (i) the stipulated dividend, and (ii) an amount equal to eleven per cent. of the stipulated dividend as specified in sub-section (3) of section 3", the following shall be substituted, namely: — "Twenty-seven and a half per cent. of the stipulated dividend: Provided that in a case where the preference shares in respect of which the dividend is declared or paid form part of the preference share capital of a company which, in respect of the greater part of its total income, is entitled to a deduction from tax chargeable form it under the Income-tax Act, 1961 (43 of 1961), under a notification issued by the Central Government under section 294A of that Act, the reference to twenty-seven and a half per cent. of the stipulated dividend shall be construed as a reference to — (i) where the stipulated dividend in respect of such preference share is declared or paid in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1965, the said twenty-seven and a half per cent. as reduced by forty-five per cent. thereof; (ii) where such dividend is declared or paid in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1966, the said twenty-seven and a half per cent. as reduced by twenty-five per cent. thereof; assessment year commencing on the 1st day of April, 1966, the said twenty-seven and a half (iii) where such dividend is declared or paid in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1967, or the 1st day of April, 1968, or the 1st day of April, 1969, the said twenty-seven and a half per cent. as reduced by ten per cent. thereof. Explanation . — For the removal of doubts it is hereby declared that any reference in this section to deduction made from a dividend on account of the income-tax payable by the company does not include any amount deducted by the company from that dividend under section 194 of the Income-tax, 1961 (43 of 1961).". include any amount deducted by the company from that dividend under section 194 of the 3. In section 5, sub-section (2) shall be omitted.