Report No. 12
203. Dividends.- The principal officer of an Indian company or a company which has made such effective arrangements as may be prescribed for the deduction of super-tax from dividends shall, at the time of paying any dividend to a shareholder whom the principal officer has no reason to believe to be a resident, deduct super-tax on the amount of such dividend as increased in accordance with the provisions of section 59 [section 16(2), main para., latter part], at the following rates:-
(i) if the shareholder is a company, at the rate applicable to a company which has not made the arrangements for deduction of super-tax from dividends referred to above;
(ii) if the shareholder is a person other than a company, in accordance with the provisions of section 124(1) (b) [Section 17(1) (b)].
[Section 18(3D), main para.]