TDS on Dividends
Dividend income is now subject to a tax of shareholders, beginning with the assessment year 2021-2022. The provisions of section 194 have been changed as a result.
Prior to actually making any payment of whatever mode, the chief officer of an Indian company or a corporation that has made the required provisions for the declaration and dividend payments in India to a shareholder is obliged to deduct tax at source from the total dividend.
The amount is deducted at the point of crediting the money to the payee’s account or at the time of payment, whichever comes first.
WHAT IS A LOWER TDS CERTIFICATE?
A shareholder could apply to the relevant assessing authority in Form No.13 for a certification allowing the payer to pay dividends without or with a lower rate of tax deduction.
NO TDS on Dividends in the following cases:
- Whereas if the recipient files a Form No.15G declaration, no tax will be deducted. You can get the information and Form 15g here
- Also If the dividend is less than Rs.5000, there would be no TDS.
- If payment was made or credited to an insurance firm, there is no TDS.
READ ABOUT SECTION 194A
