Dear All, Just tell me whether Proposed dividend is disallowed during tax computation?
4 Replies
CA RICHA BADALIA
(CA,CS)
(1682 Points)
Replied 16 September 2011
Hi
Proposed Dividend is merely an appropriation of profit ie below the line item.It is not taken into consideration while calculating tax liability.
Tom S Peter
(Article)
(148 Points)
Replied 16 September 2011
Thank you Richa.
Then what is the logic behind adding back this for calculation of book profit u/s 115JB?
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 16 September 2011
It is a provision for unascertained liability, hence added back for 115JB. Look proposed dividend may be reduced also by members in AGM.
CA RICHA BADALIA
(CA,CS)
(1682 Points)
Replied 16 September 2011
Proposed dividend is added back for calculation of book profit u/s 115JB only if proposed dividend is debited to P/L and the logic is same it cannot be considered as an expense so it is disallowed.
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