Inter-corporate dividend
Regulation & taxA dividend received by one company from another. Where an Indian company receives one and itself distributes a dividend within the period prescribed, it may deduct what it distributes against what it received, up to the amount received.
In plain terms
The relief is conditional on passing the cash on. A holding company that receives a dividend and keeps it is taxed on the receipt at its own rate, which is part of why cash sitting one layer down is worth less than it looks.