A dividend is a payment a company makes to its shareholders out of profits, distributing a portion of earnings rather than retaining them all. Dividends are declared by the board and approved at the AGM, quoted as ₹ per share (e.g. ₹5/share) or as a **percentage of face value** (e.g. 50% on ₹10 face value = ₹5/share).
Record date
To receive a dividend, you must hold shares as of the record date — the cut-off date the company uses to determine who qualifies. For unlisted shares, the RTA maintains the register consulted on the record date.
Tax treatment
Since April 2020, dividends are taxed in the hands of the recipient at their income-tax slab rate. TDS at 10% is deducted if the dividend exceeds ₹5,000 in a financial year.
Why it matters for unlisted shares
Unlisted companies can and do pay dividends. A consistent dividend history tells you profits are real and that management returns cash to shareholders — a quality signal worth noting when evaluating a company.
Example: An unlisted NBFC paid a ₹12/share dividend (120% of ₹10 face value) — a meaningful yield for holders who bought at ₹80.