Tds on dividend

Sec 115-O is applicable in the case of Dividend declared by the domestic Indian Company.

Dividend Income is exempted for the receiver.

U/s 194, TDS @ 10% is required to be deducted on divident paid by indian companies.

But section 10(34) dividend paid by indian company is exempted in hands of receiver.

So there is no need to deduct tds on dividend paid to share holder.

TDS is only reqiured to be deducted only in case dividend falls under section 2(22)(e) i.e. deemed dividend.

Sanjana,

Govt has exempted the dividend in the hands of shareholder by introducing the concept of CDT to collect tax from the company on distributed income instead of making efforts of collecting tax from a large number of shareholder.

Since, Indian companies are required to pay CDT, there s no require ment to deduct TDS.