Tax-free Dividendsnow for shareholders !!

At a time when returns from the markets are tough to come by and expectations are low, a select band of companies have announced tax-free dividends for its shareholders. The list includes a host of PSU companies like SAIL, GAIL, Concor and Nalco, and also private sector companies like Cummins, Financial Technologies, Dabur and Crompton Greaves. While these companies have mostly announced interim dividends for the current financial year, since this is an attractive way of rewarding investors at a time when a large number of these investors may exit their holdings.

Also analysis based on historical stock price movement have shown that companies offering high dividend yields in a bear market tend to give superior capital appreciation in a bull market. However, market veterans pointed out that in reality not too many retail investors look at annualised dividend yields while buying into a stock. The best strategy is to look at the saleability of a stock before buying into such a stock. At times illiquid stocks also offer high dividend and investors buying those scrips because of such attractive payouts are stuck.