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Majesco Dividend - What Should Investors Do?

Majesco Ltd

Majesco Ltd on Tuesday has approved payment of interim dividend at the rate of 19,480%! This staggering and eye-catching number is one of the highest dividend payouts seen in recent times.

This interim dividend payout translates to an amount of Rs 2,788.4 crore on a shareholder base of 28.577 million shares. Majesco plans to go ex-dividend on December 23 and record date for dividend has been fixed at December 25. Earliest Dividend Payout will be done on December 30.

The company is paying dividend that is very close to its trading price. Now companies tend to do that in two scenarios – either the company has earned super normal profits and wants to distribute the same to its shareholders, or the company does not have any concrete plans ahead for its operations in India.

Now, what would you do if you are investor of Majesco at present.

If you are an investor of this stock what should you do? Do you hold on with the stock and take the dividend or book profit or exit the stock?

As per union budget of 2020-21, divided will be taxed as per the income slab that you belong to, so if you belong to the top slab of the income tax bracket, the dividend you earn will be taxed at 30% along with 10% TDS

On the other hand, if you were to sell the stock depending on when you bought it; you will have to pay short term capital gain tax of 15%  or long term capital gain tax of 10%.

If you are a shareholder of Majesco, it may a good idea to sell the stock rather than keep it and wait for the dividend from better tax implications perspective.