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Declaration and Payment of Dividends | Beyonte Compliance
Business Services · Corporate Governance

Declaration and Payment of Dividends

Declare and pay dividends compliantly — board recommendation, shareholder approval, TDS on dividends, interim or final dividend procedures and IEPF transfer of unpaid dividends.

  • 💰 Dividend Declaration
  • 📄 Board Recommendation
  • 🏢 AGM Approval
  • ✅ TDS Compliance
  • 📬 IEPF Transfer
💰

Declare dividends for your company

Share the dividend amount and shareholder details. We handle board resolution, tax compliance and payment.

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What We Handle

A complete declaration and payment of dividends package

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Board Recommendation

Board resolution recommending the dividend rate — for final dividends declared at the AGM.

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Shareholder Approval

Ordinary resolution at AGM approving the final dividend — interim dividends can be declared by the board alone.

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Dividend Account

Separate Dividend Account opened within 5 days of declaration — funds transferred exclusively for dividend payment.

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TDS on Dividends

TDS deducted at applicable rates (currently 10% for residents above Rs 5,000) and deposited with the government.

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Dividend Payment

Dividend paid to eligible shareholders within 30 days of declaration via bank transfer or dividend warrants.

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IEPF Transfer

Unpaid/unclaimed dividends transferred to the Investor Education and Protection Fund after 7 years.

Key Requirements

What is needed for declaration and payment of dividends

Final Dividend at AGM

Final dividend must be declared at the AGM by an ordinary resolution — cannot exceed the board's recommendation.

Interim Dividend by Board

The board can declare interim dividends without shareholder approval at any time during the year.

Dividend Account Within 5 Days

A separate Dividend Account must be opened in a scheduled bank within 5 days of declaration.

Payment Within 30 Days

Dividend must be paid to all eligible shareholders within 30 days of declaration.

TDS Compliance

TDS at 10% is deducted on dividend payments above Rs 5,000 to resident shareholders and deposited with IT.

IEPF After 7 Years

Unpaid dividends remaining unclaimed for 7 years must be transferred to the IEPF along with the shares.

ℹ️

Failure to pay dividend within 30 days attracts 18% interest per annum. Additionally, unpaid dividends remaining unclaimed for 7 years must be transferred to IEPF — along with the underlying shares. We track dividend payment status and IEPF transfer deadlines.

Common Pitfalls

Common issues with declaration and payment of dividends

Dividend not paid within 30 daysInterest at 18% per annum payable on unpaid dividends — plus ROC notices.
Separate account not openedDividend funds not transferred to a separate account within 5 days — Section 123 violation.
TDS not deducted or depositedFailure to deduct and deposit TDS on dividends — Income Tax Department notices and penalties.
IEPF transfer missedUnclaimed dividends not transferred after 7 years — penalty under Section 125 and IEPF rules.
Interim dividend during lossInterim dividend declared out of profits where none exist — a personal liability for directors.
Final dividend exceeds board recommendationShareholders cannot increase the dividend beyond the board's recommendation at the AGM.
How It Works

Simple steps, no surprises

1

Dividend amount determined

Profits assessed, dividend rate decided — board recommendation for final or board declaration for interim.

2

Board resolution / AGM approval

Board passes recommendation resolution (or declares interim dividend) — AGM passes final dividend resolution.

3

Dividend account and TDS

Separate Dividend Account opened, TDS calculated and deposited with the Income Tax Department.

4

Dividend paid and IEPF tracked

Dividend paid to shareholders within 30 days — unclaimed amount tracked and transferred to IEPF after 7 years.

Related Services

Other services you may need

🔍 Secretarial Audit →👤 KMP Appointment →🔄 Transfer of Shares →🏢 Private Limited Company →🚀 Startup Consultation →📍 Virtual Office Address →
FAQ

Frequently asked questions

An interim dividend is declared by the Board of Directors during the financial year without shareholder approval. A final dividend is recommended by the board and declared by shareholders at the AGM after the year-end accounts are prepared.

Dividends must be paid within 30 days of declaration. Failure to pay within this period attracts interest at 18% per annum on the unpaid amount.

TDS is deducted at 10% on dividend payments exceeding Rs 5,000 to resident shareholders in a financial year. For non-resident shareholders, TDS is deducted as per the applicable DTAA rate or 20% — whichever is lower.

Dividends remaining unclaimed for 7 years from the date of declaration are transferred to the Investor Education and Protection Fund (IEPF). The underlying shares are also transferred to IEPF after 7 years of consecutive unclaimed dividends.

Generally, dividends can only be paid from current year profits or accumulated profits. In certain circumstances, dividends can be paid out of free reserves — but only up to 10% of paid-up capital and reserves, and not for more than 3 consecutive years.

Ready to declare dividends for your company?

We handle board resolutions, AGM approval, TDS compliance and IEPF tracking — end to end.

Get started → Call 9819000640