Dividend

Tax Glossary Definition

Dividend

A dividend is a part of a company’s profits that it chooses to share with its shareholders. It is a way of rewarding people who invest in the company by owning its shares. Dividends are usually paid in cash, but sometimes companies may issue extra shares instead of cash (called bonus shares or stock dividends). Dividends are typically declared by the company’s Board of Directors and are paid at regular intervals, most often annually or quarterly.

Example: ABC Ltd. declares a dividend of ₹10 per share. If you own 100 shares, your dividend = 100 × ₹10 = ₹1,000 So, you will receive ₹1,000 as a reward for being a shareholder of ABC Ltd.

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