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Declaration of Dividend rules

Sanjay (Associate) (152 Points)

05 September 2017

Can anyone pls clarify whether the conditions mentioned in rule 3 of declaration of dividend rules are to be read together and be complied together or are they independent to each other..

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2 Replies

Sudhir Todkar (CS Professional) (1021 Points)
Replied 05 September 2017

If dividend is declared out of reserves then you need to be complied together with rule 3 of declaration of dividend.

If Dividend is declared out of profit then no need to complied together.

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Satya Lahiri Dandlamudi (CA Final student) (526 Points)
Replied 20 October 2017

In case of insufficiency of current year profits, dividend may be declared out of accumulated profits, if each of those conditions in the rule 3 is satisfied. They are not independent to each other.