The proposed dividend comes under which type of liability?

Contingent liability

The correct answer is option 3- Contingent liability.

Proposed dividend is proposed by the Board of Directors and declared (approved) by the shareholders in their Annual General Meeting. Board of Directors propose the dividend after the annual accounts for the year have been prepared. Annual General Meeting of the shareholders is held thereafter meaning it is held in the next financial year. Shareholders may reduce the amount of proposed dividend but cannot increase it. Since declaration of proposed (final) dividend is contingent upon shareholders approval, Proposed dividend is shown as contingent liability. A contingent liability is a potential financial obligation that a company may incur depending on the outcome of an uncertain future event. 

* Current liabilities- These are paid within a year. Examples: trade payables, outstanding expenses.

* Non-Current liabilities- These are paid after a year or operating cycle . Examples: debentures, long term loan from bank.