Section 194 of Income Tax - TDS on Dividends
All about TDS on Dividends received by Shareholders under Section 194 of the Income Tax
TDS ON DIVIDENDS RECEIVED BY SHAREHOLDERS UNDER SECTION 194 OF INCOME TAX
As per Section 194 of the Income Tax Act,1961, Every Company in India that pays any Dividend to its shareholders resident in India is required to deduct TDS on payment of Dividends.
The rate of deduction of TDS from Dividends is 10%.
No TDS is to be deducted if the total dividends paid by any company during the whole financial year do not exceed Rs. 5000/- and the same is paid other than in cash.
The provision of TDS on dividends will not apply to any dividends paid to LIC or any other Insurance Co.
From the above, it can be inferred that :
Dividends are now taxable in the hands of the shareholders and the same has to be declared as income from Other Sources.
There is TDS on Dividends by the Declarent Company which is 10% of the Gross dividend declared. However, if the yearly dividend is below 5000/- there will be no TDS. Still, the Dividend will have to be shown in the Income and tax has to be paid as dividends are taxable and there is no threshold limit.
The TDS on Dividends will be reflected in Form 26AS. So before filing the ITR, pls confirm the Form 26AS so that no income is missed.
Need any assistance in ITR Filings - Feel free to Contact us.
You have reached the end of this article.