Section 3(2) in The Preference Shares (Regulation Of Dividends) Act, 1960
(2)Where the stipulated dividend in respect of a preference share of a company issued and subscribed for after the 31st March 1959 [and before the 1st April, 1960] [Inserted by Act 10 of 1965, Section 72 (w.r.e.f. 1.4.1965). ] is free of income-tax and the company, besides paying the stipulated dividend to the holder of such share, pays to Government on his behalf any sum on account of income-tax payable thereon, then, every such share shall, as respects dividends declared after the commencement of this Act, carry a preferential right to be paid free of income-tax such amount as together with the sum aforesaid would exceed the stipulated dividend by thirty per cent. thereof.
