The Companies (Temporary Restrictions on Dividends) Amendment Act, 1975-Deferred dividends-Whether taxable in the year of declaration-Clarification regarding

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..... 210 Dated 25/2/1977 Subject:- The Companies (Temporary Restrictions on Dividends) Amendment Act, 1975-Deferred dividends-Whether taxable in the year of declaration-Clarification regarding. Section 5A(2) of the Companies (Temporary Restrictions on Dividends) Amendment Act, 1975, effective from 1st March, 1975, permits the companies to declare dividends in excess of the distributable prof .....

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..... the previous year in which they are so declared. The shareholders are being paid interest on the deferred dividend only because their right to receive the entire dividend has already accrued to them in the year in which the dividend was declared. In view of the above, the entire dividend declared will be deemed to be the income of the year in which the dividend has been declared and credit for tax .....

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