tds on divends

hi swajitha,

    its applicable on each payment, coz nowhere in the section, it is mentioned that its for the whole year. If there was an intention to treat it for the whole year, there would have been an express statement (as in section194J). hence an inference can be made that it is for each payment

Originally posted by : Mukund
	hi swajitha,     its applicable on each payment, coz nowhere in the section, it is mentioned that its for the whole year. If there was an intention to treat it for the whole year, there would have been an express statement (as in section194J). hence an inference can be made that it is for each payment

I want to correct you Mr. Mukund, TDS on dividend is deductiable if it is paid to Indian Resident and "the amount of such dividend or, as the case may be, the aggregate of the amounts of such dividend distributed during the F.Y. by the company, to the shareholder, does not exceed Rs. 2500." This is as per Section 194

ya sorry for the wrong info. shudhanshu is absolutely correct.

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 in cash or before issuing any cheque or warrant 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 rates in force :

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 an account payee cheque; and

but for dividend paid by indian cos there is no need to dedect tds as it is exempt in the hands of the recepient...

yeah you are right dividend is exempted in the hands of the shareholders but dear if TDS is deducted they(shareholders) will get the credit of TDS. The purpose of the TDS is that the government keep an eye of the income of the people from the point of its generation.

There is nothing mentioned at each time but if the payment exceeds Rs 2,500. either it is Interim or Final. and if Form 15H /G  as applicable to avoid TDS

a credit is given for tds with respect to dividend????????so u mean that dividend is first included in total income of the assessee and tax is calculated and then a tds credit is given....then it cannot be called as on income exempt in the hands of the assessee...

Its not like that dividend income will not be considered while calculating gross income as it is exempted and TDS deducted will be considered against his total tax liabilty.

no tds needs to deducted on dividend as the companys are laible for dividend distribution tax @ 15.995% .

Originally posted by : CA Pramod Jain
	no tds needs to deducted on dividend as the companys are laible for dividend distribution tax @ 15.995% .

you are right it is from 01-04-2003 onwards in the case of dividend referred u/s 115-O

m clear with tat mr.pramod but wat abt the 2500 limit(in case of foreign cos no need to deduct tax if the amt of dividend is less than 2500),,is it in aggregate or individual payment....can u pls clarify

Originally posted by : swajitha
	m clear with tat mr.pramod but wat abt the 2500 limit(in case of foreign cos no need to deduct tax if the amt of dividend is less than 2500),,is it in aggregate or individual payment....can u pls clarify

It is in the agrregate and not individually
 

k thanks everyone...got it cleared

 I have a doubt, if co. already paid the tax on dividend then why there is need for deduction of tds? Why govt keeps the revenue if it's already paid by the co as tax on dividend.? Can Anyone tell me plz