Person Who Has a Substantial Interest in the Company – Section 2(79) | Income-tax Act, 2025 vs 1961

§ 2(79) · Income-tax Act, 2025

Person who has a substantial interest in the company

ITA 2025 · 2(79) ITA 1961 · 2(32)
Definition — Section 2(79)

Means a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend, whether with or without a right to participate in profits) carrying not less than 20% of the voting power.

Act Comparison
Income-tax Act, 2025
2(79)
Person who has a substantial interest in the company
Income-tax Act, 1961
2(32)
Person who has a substantial interest in the company
Key Points
  • Maps to Section 2(32) of the 1961 Act — identical threshold of 20% voting power in both Acts
  • Relevant for deemed dividend provisions under Section 2(40)(e) of the 2025 Act — loans to such shareholders in closely-held companies may be treated as dividend
  • Preference shareholders are excluded — only equity-equivalent voting power counts
💡 Practical Note

The 20% threshold is crucial — anyone holding 20%+ equity in a closely-held company risks deemed dividend treatment on any loans received from it.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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