Dividend remittance

This query is : Resolved

Srinivas (Querist)
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13 December 2011 I would like to know the procedure for Remittance of Dividend to Parent company (100% holding company)outside India.

Please note that my query is regarding interim dividend, and I would like to know whether opening a dividend payment account with our Bank is mandatory or not?

CS, Deepak Pratap Singh

CS, Deepak Pratap Singh (Expert)
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13 December 2011 Dear friend, for remitting dividend to your parent company required prior approval of Reserve Bank of India under FEMA. It is mandatory to open a account for payment of dividend as per provisions of the Companies Act, 1956.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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13 December 2011 No approval from RBI is required under FEMA before remitting dividend to parent Company.

However the Dividend Distribution Tax(DDT) needs to be paid before remmiting the said amount.

Transfer Pricing provisions shall also apply in the given case.

Anuj
+91-9810106211
femaquery@gmail.com

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