General reserve

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Sumit (Querist)
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07 September 2013 Is it compulsory for the private companies to transfer the profit to general reserve each year.

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 September 2013 COMPULSORY TRANSFER TO RESERVES

No amount need be transferred to Reserves if the dividend declared does not exceed 10%.

No dividend can be declared and paid in excess of 10% unless minimum amount prescribed as under is transferred to Reserves.

Rate of dividend % of current profits
exceeding up to
10.0% 12.5% 2.5%
12.5% 15.0% 5.0%
15.0% 20.0% 7.5%
20.0% 10.0%

Sumit

Sumit (Querist)
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07 September 2013 Thank you sir..

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