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of <h1>Clarification on 'Current Profits' for Dividends: Consider After-Tax Profits, Include Adjustments, Follow Section 205(2A) for Reserves.</h1> The circular addresses the interpretation of 'current profits' for dividend declarations and reserve transfers under company law. It clarifies that 'current profits' should be considered as profits after tax, not before tax, despite the lack of a clear definition in the Act or Rules. It also specifies that items such as development rebate reserves written back and adjustments for previous years should be included in the calculation of current profits. Additionally, dividends can only be declared after accounting for depreciation and transferring a percentage of profits to reserves, as mandated by section 205(2A).
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