I am doing audit of a govt listed co. It has proposed a dividend and created the provision for dividend tax on 31 March 2010 @ 16.995%(15+10%+3%), but the dividend was declared in AGM on 21 Sep2010. At that time the rate of dividend was 15%+7.5%+3%, so co.paid the tax @ 15%+7.5%+3% on 4 oct2010 and the ba;ance provision is appearing on the liabilities side. Should the co. reverse the provision on 21 Sep 2010, the date of AGM or on 4Oct the date of payment. I have to finalise the accounts from 1 apr to 30 sep.
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dividend tax
Replies (3)
The co. should reverse the excess provision immediately on 21.09.2010.
but i think income is pertain to fy 09-10 so surcharge must be applicable @ 10% instead of 7.5% because every finance bill amendment is based on period in which income is earned on which tax to be paid
Ajay Garg, in that case the member would not approve any dividend in the AGM and rather board will announce payment of interim dividend for F/Y 2010-11 to save the extra 2.5%. And ultimately shareholders would receive the money
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