Section 115Q provides that if the principal officer of a domestic company and the company do not pay tax on distributed profits as required by s. 115-O, each is deemed to be an assessee in default for the tax payable. All provisions of the Act for collection and recovery of income-tax then apply.
The section works with s. 115P, which charges interest on the same default. Its Explanation is shown as "[***]".
Operative consequences
The amount of unpaid tax on distributed profits can be recovered by the methods available for income-tax in default.
The principal officer is exposed to recovery as well as the company.
Section 115Q carries no omission note, but s. 115-O applies only to dividends declared, distributed or paid on or before 31 March 2020. The section has effect only for unpaid tax of that period. The Finance Act, 2026 does not amend it.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is none.
Function in the statutory architecture
Section 115Q provides that if the principal officer of a domestic company and the company do not pay tax on distributed profits as required by s. 115-O, each is deemed to be an assessee in default for the tax payable. All provisions of the Act for collection and recovery of income-tax then apply.
The section works with s. 115P, which charges interest on the same default. Its Explanation is shown as "[***]".
Operative consequences
Status
Section 115Q carries no omission note, but s. 115-O applies only to dividends declared, distributed or paid on or before 31 March 2020. The section has effect only for unpaid tax of that period. The Finance Act, 2026 does not amend it.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is none.