Hero Honda, Jyothy Laboratories, Marico are some of the companies that declared interim dividends this month.
Indian companies are rushing to declare interim dividends for the year FY16. The latest to join the bandwagon of companies that are declaring dividends for the year are Hero Honda, Jyothy Laboratories and Marico.
Hero Honda has declared an interim dividend of Rs 40 per share, while Marico and Jyothy Laboratories have declared interim dividends of Rs 1, and Rs 4.
Around 47 companies held their board meetings to declare interim dividends while a higher number is slated to have a board sitting tomorrow as companies rush to pay the dividends before March 31st. From financial year 16-17, the government has proposed a 10 percent additional levy on dividend income above Rs 10 lakh, which could hit some of the large promoters and shareholders
Dividend income, however, is taxed through dividend distribution tax when it is paid to shareholders. However, in the Union Budget the finance minister has said that Dividend Distribution tax (DDT) uniformly applies to all investors irrespective of their income slabs. This is perceived to distort the fairness and progressive nature of taxes. Persons with relatively higher income can bear a higher tax cost.
In the last few days, over 200 companies have held board meetings to declare interim dividend. The dividends will have to be credited to shareholders accounts before March 31st, as the new rule of additional tax on dividend over Rs 10 lakh will get initiated in the next financial year.