INOX India Ltd. and Nelco Ltd. will be of interest on Monday as the day marks the last session for retail investors to buy shares to qualify for receiving the dividend before the stock goes ex/record-date.
The record date determines the eligible shareholders who will receive the dividend payment. The ex-dividend date, which mostly coincides with the record date, marks when the share price adjusts to reflect the upcoming payout.
INOX India Ltd has announced a final dividend of Rs 2.00 while Nelco Ltd has declared a final dividend of Re 1. The record date for both the stocks is June 9, which is tomorrow.
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T+1 Settlement Cycle
Given India's T+1 settlement cycle, shares purchased on the record date (June 9 in this case) will not be eligible for the dividend payment. Therefore, investors who own shares by June 8 will be the beneficiaries.
Dividends are a way for companies to reward shareholders. It is the portion of profits that a company distributes to its shareholders and is essentially a return on the investment shareholders make in the company's equity. Such payments are made through final, interim, and special dividends.
Dividends are taxable in the hands of the shareholders, and companies are no longer required to pay the Dividend Distribution Tax (DDT). The TDS on dividend income for resident individuals is 10% if the dividend amount exceeds Rs 5,000 in a financial year.
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