Section 4 of PSRD Act, 1960 : Section 4: Special Provisions In Relation To Companies Where A Portion Of Their Income Is Not Chargeable To Income-Tax

Explanation using Example

Imagine a company, "Green Fields Ltd.", that issued preference shares before April 1, 1960. This company is involved in agriculture, and a part of its profits comes from agricultural activities, which are exempt from income tax. Let's say the total profits for the relevant period are $1,000,000, out of which $200,000 is agricultural income (tax-exempt). The remaining $800,000 is taxable income.

Now, Green Fields Ltd. wants to increase the dividend on its preference shares. According to Section 3 of the Preference Shares (Regulation of Dividends) Act, 1960, they could increase the divide...

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