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Dividend tax

Ranjit (Others) (58 Points)

24 March 2016

I hold ESOP shares from my earlier employer. The company pays regular dividends. On March 12, the company has declared a huge dividend (special dividend) amounting to more than 10L. The payout for the dividend will happened in April 2016. My queries: 1) Which FY should I account this dividend, FY 2015-16, or 2016-17. 2) Also, the company has not declared final dividend. The final dividend gets declared in April 16. How should the final dividend be accounted.?

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SANGAMESWARAN.N (Senior accountant) (116 Points)
Replied 24 March 2016

as per "AS-9 revenue recognition" state that, dividend from investment in shares are not recognised in the statement of profit and loss account untill a right to receive payment is established.

from your case you said above, that special dividend declared on march 12 of **this year**

**(assume to be this year)**

so you can show in the books of Fy-2015-16, because, the reason is that you get the right to receive the dividend.

you said above , final dividend is not declared and it will get declared on april-2016, then it will allowed to show in the books of Fy- 2016-17.

Regards....

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Ranjit (Others) (58 Points)
Replied 24 March 2016

Thank you for the clarification. For the second part in which case the final dividend will get declared in April 2016, even as an indivdual taxpayer, do I need to include this to my dividend of FY 2016-17 ?