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Friday, March 4, 2016

Firms hurry to beat clock on dividend tax

Companies seem to be striving to beat the budget proposal to impose a 10 per cent additional tax on dividend payable to wealthy individuals by declaring interim payouts before the individual tax provision kicks in from the new financial year beginning April 1.

Over the past three days, more than 50 companies have informed stock exchanges that they have decided to convene board meetings to decide on payment of interim dividends. Traditionally, most of these companies declare dividend along with their fourth quarter (Jan-Mar) working results during the April-June period. According to analysts, many companies are trying to reward their promoters and large investors before the additional tax on dividend comes into force.

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