Income Tax on Dividends- FAQs

• November 5, 2020
• CA Chandan Agarwal's Office

FOR RESIDENT SHAREHOLDERS:

When valid PAN is available in the records of the Company: Tax deduction rate on Dividend – 7.5%#

When valid PAN is not available in the records of the Company: Tax deduction rate on Deividend- 20%

#The tax rate has been reduced from 10% to 7.5% with effect from 14 May 2020 until 31 March 2021 vide CBDT Press release dated 13 May 2020.

Requirements:

Update/Verify the PAN and the residential status as per Act, if not already done, with the depositories (In case of shares held in Demat mode) and with Registrar & Transfer Agents^ (RTA) (In case of shares held in Physical mode)

Read more on: https://taxguru.in/income-tax/income-tax-dividends-faqs.html