Premium of Preference Share

Others 593 views 1 replies

Dear All,

1. Is the premium amount will be treated as divident in case of cumulative preference shares and is it free from income tax as divident?

2. Either the divident on non-cumulative preference share is free from income tax or not? If it's free from income tax then is the company have to pay CDT on declared dividents, and also tax on declared divident because that is again profit. Ya that divident declared can be a part of P&L and after deduction of divident from profit, the company have to pay tax.
 
3. What about cumulative preference share: is the premium declared on cumulative preference share will considered as divident? and company have to pay both tax on profit and on divident?

4.Can an agriculture based company pay divident and is it free from CDT means corporate divident tax and corporate tax both?

Replies (1)

Dear sangram,

1. Any payments to share holders for redemption is not dividend and no cdt is payable on that amont. But for the share holder it is income and will be taxable under income form other sources.

2.Dividend on non cummulative prefence share is exempted( if from indian company). But it is attracted to CDT.

3.again the answer is same...


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
26 May 2026
CA / MBA (Finance) / CMA / M.Com (Finance)

Sri Aurobindo Gnostic Centre of Education

New Delhi

CA

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
23 May 2026
Article Assistant

Geeta Manchanda & CO.

New Delhi

CA Inter

View Details
Company
26 May 2026
Senior Accountant cum purchase Manager

Vardhaman Group of India

Pimpri Chinchwad

CA Inter

View Details
Company
29 May 2026
Accounts assistant

Shubh Consultancy

Mumbai

Graduate (Any)

View Details
Company
29 May 2026
Company Secretary - Part time

Shaswat initial support private limited

Ahmedabad

CS

View Details