In a response to a Lok Sabha question from Shri Ashok Kumar Rawat, the Ministry of Corporate Affairs clarified the time limit stipulated in Section 123(4) of the Companies Act, 2013. The Minister of State, Shri Harsh Malhotra, confirmed that the provision refers to “five days,” not “five working days,” for depositing declared dividends into a separate bank account. The minister also noted that an exemption from this provision is already in place for government companies where the entire paid-up share capital is held by the Central Government, a State Government, or a combination thereof. The ministry’s response concluded by stating there are no current proposals under consideration to provide further exemptions or extensions to this five-day time limit.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 1316
ANSWERED ON MONDAY, JULY 28, 2025
SRAVANA 6, 1947 (SAKA)
TIME LIMIT IN SECTION 123(4) OF COMPANIES ACT, 2013
QUESTION
1316. SHRI ASHOK KUMAR RAWAT:
Will the Minister of CORPORATE AFFAIRS
be pleased to state:
a. whether the time limit provided in Section 123(4) of the Companies Act, 2013 of five days is five working days or five days in continuation;
b. whether any time limit exemption or extension of time is given to the companies in case of all the five days of a week and banks holiday; and
c. if not, whether the Government has any proposal/is considering for providing such exemption?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT AND HIGHWAYS
[SHRI HARSH MALHOTRA]
(a) to (c):- (i) Section 123(4) of the Companies Act, 2013 reads as under:
“The amount of the dividend, including interim dividend, shall be deposited in a scheduled bank in a separate account within five days from the date of declaration of such dividend.”
The provision refers to “five days” and not “five working days”.
ii. Vide notification no. G.S.R. 463(E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments or by one or more Government Company is exempted from the application of section 123(4) of the Companies Act, 2013.
iii. At present no proposal for granting any further exemption under subsection (4) of section 123 of the Companies Act, 2013 is under consideration.
