Do we need to consider capital nature profit while calculating amt can be utilized from generql reserve for dividend payment.

1 answer

Ravi Staff April 10, 2019

Sec 123 doesn’t distinguish between capital profits and revenue profits. that means both can be used for distributing dividend. Only condition given in section 123 is that it should be realised profit, unrealised profit cannot be used for dividend.
now if question specifies capital reserve or capital profits, it should not be used unless it is specified or indirect hint is given that profits are realised. Write assumptions when you dont use or use capital profits clearly in exams.


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