**Summary:**
This document summarizes the Ministry of Corporate Affairs' response to Lok Sabha Unstarred Question No. 1316, answered on July 28, 2025, regarding the time limit specified in Section 1234 of the Companies Act, 2013.
The response clarifies that the five-day period stipulated in Section 1234 for depositing dividend amounts into a separate account refers to five calendar days, not five working days.
Currently, the only exemption from Section 1234 applies to Government Companies where the entire paid-up share capital is held by the Central Government, State Governments, or a combination thereof, as per notification no. G.S.R. 463E dated June 5, 2015.
The Ministry states that there is no current proposal under consideration to grant any further exemptions under sub-section 4 of section 123 of the Companies Act, 2013, regarding the time limit for dividend deposit.
Key Entities Referenced
Companies Act, 2013: A law governing companies in India, specifically sections related to dividend distribution.
Section 1234 of Companies Act, 2013: A specific section within the Companies Act, 2013, concerning the time limit for depositing dividend amounts.
SHRI ASHOK KUMAR RAWAT: A member of LOK SABHA who posed a question regarding the interpretation of Section 1234 of the Companies Act, 2013.
MINISTRY OF CORPORATE AFFAIRS: The government ministry responsible for administering the Companies Act, 2013.
SHRI HARSH MALHOTRA: Minister of State in the Ministry of Corporate Affairs and Minister of State in the Ministry of Road, Transport and Highways, who provided the answer to the question.
Central Government: The Union government of India.
State Government: The government of an individual state within India.
G.S.R. 463E: A notification number issued by the Ministry of Corporate Affairs on 5th June, 2015, related to exemptions under the Companies Act, 2013.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 1316
ANSWERED ON MONDAY, JULY 28, 2025
SRAVANA 6, 1947 (SAKA)
TIME LIMIT IN SECTION 123(4) OF COMPANIES ACT, 2013
QUESTION
1316. SHRI ASHOK KUMAR RAWAT:
Will the Minister of CORPORATE AFFAIRS
be pleased to state:
a) whether the time limit provided in Section 123(4) of the Companies Act,
2013 of five days is five working days or five days in continuation;
b) whether any time limit exemption or extension of time is given to the
companies in case of all the five days of a week and banks holiday; and
c) if not, whether the Government has any proposal/is considering for
providing such exemption?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFAIRS AND
MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT AND HIGHWAYS
[SHRI HARSH MALHOTRA]
(a) to (c):- (i) Section 123(4) of the Companies Act, 2013 reads as under:
“The amount of the dividend, including interim dividend, shall be
deposited in a scheduled bank in a separate account within five days from
the date of declaration of such dividend.”
The provision refers to “five days” and not “five working days”.
(ii) Vide notification no. G.S.R. 463(E) dated 5th June, 2015 issued by Ministry
of Corporate Affairs, a Government Company in which the entire paid up share
capital is held by the Central Government, or by any State Government or
Governments or by the Central Government and one or more State
Governments or by one or more Government Company is exempted from the
application of section 123(4) of the Companies Act, 2013.
(iii) At present no proposal for granting any further exemption under sub-
section (4) of section 123 of the Companies Act, 2013 is under consideration.
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