Circular : No. 210 -Income Tax Section 5A(2) of the Companies (Temporary Restrictions on Dividends) Amendment Act, 1975 effective from March 1, 1975 permits the companies to declare dividends in excess of the distributable profits. However, the dividends in excess of the distributable profits are to be paid after the expiry of two years in two equal annual instalments together with interest due thereon at the rate of 8 per cent per annum
