Dividend tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 Dear Experts,
can we pay both dividend + dividend tax from same bank account considering they are related.

Ajay Mishra

Ajay Mishra (Expert)
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25 September 2013 You will keep the dividend amount in separate bank account after deducting of tax. You will not keep both in same account.

Ajay Mishra

Ajay Mishra (Expert)
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25 September 2013
Section 205A(1) provides that the company shall, within seven days of the date of expiry of period of thirty days from the date of declaration of dividend, transfer such unpaid or unclaimed dividend to a special account. The special account will be called as unpaid dividend account of M/s. ................... Co. Ltd./Pvt. Ltd. and is to be opened by the company in a scheduled bank.

Penalty for failure in transferring unpaid dividend to unpaid dividend account:

Section 205A(4) contains provisions as to penalty for default in transferring unpaid or unclaimed dividend to unpaid dividend account. Accordingly, the company shall pay interest @ 12% p.a. on so much of amount of unpaid or unclaimed dividend which has not been transferred to unpaid dividend account. Such interest shall be paid from the date of the default and benefit of such interest shall accrue to shareholders in proportion to the amount remaining unpaid to them.

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