Capital redemption reserve
Venkatesh (Student CA IPC / IPCC) (68 Points)
04 June 2016
SUPRIYA
(PRACTICE)
(853 Points)
Replied 04 June 2016
When company redeem its shares out of its profit which was otherwise available for distribution as divident, the value of shares through which issued share capital account is reduced is transfered to capital redemption reserve.
Share Premium once received can be utilised for specific purpose as mentioned in Act only hence it is not used.
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