Computation of Dividend

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This discussion clarifies how company dividends are calculated. Dividends are legally and accounting-wise determined based on the face value or paid-up capital of shares, not their market value. Section 51 of the Companies Act, 2013, along with the company's Articles of Association, governs this process.

abhijit majumder

abhijit majumder (Querist)

03 August 2026 Sir
Dividend is a portion of profit that will be distributed among the shareholders.
My query is % of Dividend calculated on which amount ie
A) Face value of share(ie paid up capital)
or
B) Market value of the share
Is there any explicit legal and/or accounting guidelines on this regard?
Regards
Abhijit

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

03 August 2026 Correct Basis: Calculated on Face Value / Paid-up Capital.

Governing Provision: Section 51 of the Companies Act, 2013 (read with Table F / Company's Articles of Association).

Market Value: Unrelated to corporate dividend declaration; used only by investors to calculate Dividend Yield.

abhijit majumder

abhijit majumder (Querist)

04 August 2026 Sincere thanks to Sir Aashok Kumar Sharma for clarify my doubt on Dividend .
Regards
Abhijit

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