If the company ‘A’ pays me Rs 2000 as a dividend - will there be any TDS?
Later a month, the company ‘B’ pays me Rs 3100 as a dividend - now will there be any TDS?
Later a month, the company ‘C’ pays me Rs 5100 as a dividend - will there be any TDS?
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I’m asking this because it has stated that “The deduction is at 10% on the number of dividends, only if a resident shareholder’s total dividend in a financial year exceeds INR 5,000”
Any dividend paid on or after 1st April 2020 is subject to deduction of TDS at 10% (7.5% for FY 2019-20) if the amount exceeds INR 5,000. The limit of INR 5,000 is for the total dividend in a financial year received by a shareholder from a Company or AMC.
Therefore, in the case of Company A and Company B, there would be no deduction of TDS, However, Company C must deduct TDS at 10% since the total dividend in the financial year exceeds INR 5,000.
However, it is observed that many Companies and AMCs deduct TDS on dividend payment irrespective of the amount of dividend.
You can read more about TDS on dividend here
TDS u/s 194 for Dividend on Equity Shares
TDS u/s 194K for Dividend on Equity Mutual Funds
For any further queries, write to us on [email protected]
But when the company ‘B’ pays Rs 3100 then the total dividend in the financial year exceeds INR 5,000 by Rs 100. So, the company won’t detect any?
Recently, I got a dividend from Infosys (below 3K) and likely they didn’t detect any TDS.
A specific company has to look out only for the dividend given by them, not your overall dividend receipts.
The limit of INR 5,000 is for the total dividend in a financial year received by a shareholder from a single Company. If you are receiving dividend from multiple companies, the limit of INR 5,000 would apply for dividend from each company or AMC.
Since the dividend is below the limit of INR 5,000, TDS would not be deducted. There are other Companies that mentions deduction of TDS irrespective of the amount in the email sent to the shareholder.