General Circular No. 17/2002

No.17/36/2002-CL.V

Government Of India

Ministry Of Finance And Company Affairs

Department Of Company Afffairs

5th Floor, ‘A’ Wing, Shastri Bhawan,

New Delhi – 110 001.

Dated   5th July, 2002.

To

All Chambers of Commerce & Industry

(As per standard list)

Subject:- Dividend Warrant-containing information on TDS.

Sir,

Section 205(3) of the Companies Act, 1956 provides for payment of dividend except in cash and Section 205(5)(b) of the Act further provides that the dividend payable in cash may be paid either by cheque or warrant.

2. Subsequent to the amendment to Section 10(33) of the Income-tax Act, dividend would be taxable in the hands of the recipient in respect of dividend income and this would in the opinion of the Department of Revenue, involve huge amount of paper work as persons responsible for paying the income would be required to deduct tax at source from the amount of dividend paid and issue of TDS certificate. The Department of Revenue in order to reduce the additional paper work involved in the above method had suggested that the dividend warrant or intimation sent to the shareholders by companies may be modified to contain the TDS also.

3. Accordingly, in consultation with the Department of Revenue, it is hereby, clarified that henceforth, companies may adopt a format for dividend warrants to include information on TDS as under:-

Ledger

Folio

No. of Equity Shares Warrant No. Gross Dividend

 

(Rs.)

Rate of Tax

 

Tax Deducted

 

(Rs.)

Net Amount Payable

(Rs.)

 

 

 

 

 

 

Certified that a sum of Rs. (in words)………………….has been deducted at source and paid to the credit of the Central Government.

Place……..

Date…….

Signature of person responsible for deduction of tax

Full Name……………….

Designation………………

4. The above format of TDS may be printed on the reverse side of the warrant duly signed by persons responsible for deduction of tax.

5. You are requested to kindly bring to the notice of your constituents about the circular and request them to adopt the same.   Wherever demat and transfer of dividend by electronic mode is used, the companies may, however, issue TDS in the same format.

6. While dividend is paid by cash or cheque, companies may issue TDS certificate in the above format alongwith dividend intimation.

Yours faithfully,

(E. Selvaraj)

Joint Director (T)

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