Dividends - Transfer of unpaid dividend Scope of the section explained in the context of expressions “has not been paid” and “warrant in respect thereof has not been posted” used therein.

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....6‑1977. Subject:- Dividends - Transfer of unpaid dividend ‑ Scope of the section explained in the context of expressions "has not been paid" and "warrant in respect thereof has not been posted" used therein. Reference may be made to this Department's Circular No. 28/76, dated 1‑9‑1976 (printed as Clarification 3), in which it was clarified that the two expressions "ha....

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....account, the company is prevented from utilising that money for its day‑to‑day business purposes. This is on the principle that the dividend declared has to be treated as a debt owed by the company to the shareholder and, therefore, it is shareholder's money which has to be separately kept to be paid to him/her on demand, and under section 205A(5) the company is empowered to make payme....