Recently I received dividend from listed company. The interim dividend was rs. 3050 but they deducted tds of 229 i.e. 7.5%. I asked them clarification why they deducted tds once dividend is less than rs 5000. The co said though dividend is less than 5000 now, your dividend amount is likely to exceed rs 5000 in future in this financial year. and the reference for this is last financial year's dividend. The dividend for last year was more than rs5000 so this year also it likely to exceed the limit of 5000.
I want to know is it correct practice?
please clarify. Thank you
CAclubindia
