Taxability of Preference Dividend for Prior Years

One Unlisted public ltd company is having Preference share capital in it's Cap Table. The dividend on Preference shares is unpaid since 31-03-2019 and now due for years ending 31st March 2019, 2020 and 2021. Company is now in profits and can pay dividend.

Question is - will the dividend declared in Current Years AGM in Sep-Oct 2021 for prior years, will attract TDS u/s 194 for TDS on Dividend or will it attract DDT (upto 31-03-2020) and TDS for year 2020-21?

If it will attract DDT, in which Assessment year it should be deposited? Please guide.

Replies (1)

1. DDT for prior years - No

2. TDS u/s 194 - Yes,    ( Please see the provision)

     

194. The principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment [by any mode] in respect of any dividend or before making any distribution or payment to a shareholder, who is resident in India, of any dividend within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2, deduct from the amount of such dividend, income-tax [at the rate of ten per cent] :

Provided that no such deduction shall be made in the case of a shareholder, being an individual, if—

(a)  the dividend is paid by the company by [any mode other than cash]; and

(b)  the amount of such dividend or, as the case may be, the aggregate of the amounts of such dividend distributed or paid or likely to be distributed or paid during the financial year by the company to the shareholder, does not exceed [five thousand] rupees:

 


 

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