As per company law, depending on your rate of proposed dividend, a certain % of current profit is to be transferred to reserve.
I have 2 doubts regarding this.
1) Rate of proposed dividend is calculated on Share Capital, right? i.e. Total Proposed dividend/Total Share Capital *100
2) The required % is to be transferred to Capital Reserve, or some other Reserve?
Dear Aditya,
The rate of dividend is calculated on the paid-up capital of the Company. Further the amount will be transfered to the General Reserve.
But I m still confused in one regard.
If the reserve to be transferred is General Reserve, then what is the intention of the law.
Because in next year that transferred amount becomes eligible for dividend again.
if dividend is rs. 3000000 what would be the dividend tax rate
CAclubindia
