Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: cpt :: ACCOUNTING STANDARD :: empanelment :: list of goods taxed at 4% :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: TDS
News Headlines »
 CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 FinMin looks at cut in corporation tax
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest

Cos may not rush in for interim dividends
March, 02nd 2007

Dividend distribution tax proposal comes into effect from April 1

It is the first and most tempting thing to do, but may not be quite possible, says the Chief Financial Officer of a mid-sized company, when asked if companies were likely to rush in and announce interim dividends before April 1, following the increase in the dividend distribution tax (DDT).

This Budget had increased the DDT by 2.5 per cent from 12.5 to 15 per cent and some analysts were of the opinion that there would be a spate of companies rushing in to announce interim dividends by March 31, when it comes into effect. By announcing a dividend in the current financial year, companies would not attract the additional tax burden.

But a company official points out that the last time such a scramble had taken place was when DDT was introduced some years ago. The proposal was to come into effect in June and that gave companies time to announce interim dividends. The Union Finance Ministry had to finally step in to stem the scramble, he recounts.

But once bitten, twice shy and this year the Ministry has not given companies the liberty of time, as the DDT proposal comes into effect from April 1.

Mr N. Santhanam, Group-President (Legal) and Chief Financial Officer, Nicholas Piramal India Ltd, quite agrees. If a listed company had to declare an interim dividend, it requires three weeks to inform the stock exchanges.

And that makes it difficult. Companies with F&O scrips, need 30 days notice and for them it becomes physically impossible to declare an interim dividend by April, he said.

Also, it is an incremental increase of about 3 per cent and companies are unlikely to scurry in for interim dividends, Mr Santhanam said. It would be bad corporate governance, he added.

A stock market analyst echoes this assessment, in that companies may not rush in for an interim dividend before March 31. The large dividend payers are the public sector units and the large oil PSUs, for instance, have announced their interim dividends.

Companies in the FMCG (fast-moving consumer goods) and pharma sector, for example, with a December year-ending, may still look at the prospect of giving a dividend, he said.

Though some companies may go in for an interim dividend, responding to the Budget's announcement, it is unlikely that the big listed companies will rush in to do the same by the end of the month, he said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions