TCS announces 1800% special dividend: What is special dividend and how it is different from traditional dividend?

TCS Dividend 2024, TCS Dividend 2024 Record Date: India's largest IT firm Tata Consultancy Services (TCS) has reported better-than-expected Q3 performance. The IT technology services provider during the quarter ended December posted PAT at Rs 11,058 crore, which is a 2.5 per cent decline on a sequential basis. The technology major also announced a third interim dividend of Rs 9, or 900 per cent, per Equity Share of Rs 1 each of the company. The company also announced a special dividend of 1800 per cent, or Rs 18. 

What is special dividend and how it is different from traditional dividend?

A special dividend is a non-recurring distribution of company assets. It is usually a one-time payment and is announced by the company after strong earnings results, asset sales or any other such event. Special dividends are also paid by companies when there are some changes in financial structure. 

A dividend is generally a part of the profit that a company gives to shareholders. It is often distributed quarterly. Companies, that make huge profits, usually pay dividends to reward loyal investors. This corporate action reflects positively on a company and helps it earn the trust of investors. The company, by paying special dividends, also signals that the company has strong financials and good growth prospects.

Is there any downside to paying a special dividend?

Just like dividend payment, the payment of special dividends can drain the company's cash. 

Is special dividend taxable?

Yes, a special dividend is taxable. Taxation is done as ordinary income tax and capital profit. 

What is an interim dividend?

An interim dividend is a dividend that is paid by a company to its shareholders at any point in the year. Also, an interim dividend doesn't require approval from shareholders. 

TCS dividend 2024 record date

Meanwhile, TCS has fixed January 19 as the record date for the payment of the dividend.