Tax on Dividend law

Taxation
1

Hi,

These days am noticing many cos who has announced dividend and are about to announce, are sending alerts to shareholders w.r.t to filling 15G duly signed form. Here’s the snapshot below. What If am not meeting 1st condition so in that case if I do not send the form, any repurcussion other than Tax deduction. Is there a facility in console to check dividend received for the year.

For Resident Shareholders

  1. Where, the Permanent Account Number (PAN) is available and is valid:
  2. Tax shall be deducted at source in accordance with the provisions of the Income-tax Act, 1961 at 7.50% ( as per Finance Ministry’s Press Release dated May 13, 2020 ) on the amount of dividend.
  3. No tax shall be deducted in the case of a resident individual shareholder, if:
    1. the amount of such dividend in aggregate paid or likely to be paid during the financial year does not exceed INR 5,000; or
    2. the shareholder provides duly signed Form 15G (applicable to any person other than a Company or a Firm) or Form 15H (applicable to an Individual above the age of 60 years) provided that all the prescribed eligibility conditions are met. The format of Form 15G and Form 15H are available on the website of the Company
2

@Quicko

3

what if the shareholder don’t give or forgets to provide the Form 15 , to the company ? will he still get the dividend ?

4

If the dividend for the financial year exceeds INR 5,000, the Company would pay dividend after deducting TDS @10% (reduced to 7.5% for FY 2019-20). The shareholder can claim credit of such TDS in the Income Tax Return.

It is not mandatory to submit Form 15G or 15H. If such form is not submitted, Company would deduct TDS on dividend as explained above.

If you have received an email for deduction of TDS on dividend - Here is a blog for TDS on Dividend paid in FY 2020-21

5

It is not mandatory to submit Form 15G or 15H to the Company. If the shareholder does not submit it, he/she would receive the dividend after deduction of TDS @7.5.% if the amount of dividend exceeds INR 5,000.

If you have received an email for deduction of TDS on dividend - Here is a blog for TDS on Dividend paid in FY 2020-21

For any further queries, write to us on [email protected]

1 Like
6

Hello Quicko,

Say I bought a laptop of 1lkh Rs. This is for trading purposes. So I avail depreciation benefit on the laptop. What if the laptop gets stolen before all the installments have completed? How does it further play out?

Thanks.

8

If the laptop is used for your trading activity, you should report it as a Fixed Asset and claim depreciation on it each year. If the laptop is stolen or damaged, you can write off the asset value and claim it as an expense in P&L Account.

For any further queries, write to us on [email protected]