ITR filing: Why taxpayers need to give quarter-wise breakup of dividend income?

  • December 19, 2021
  • CA Chandan Agarwal's Office

Income tax return: In order to calculate the interest for the default in payment of advance tax liability, taxpayers are now required to give a quarter-wise breakup of dividend income received while filing ITR for AY 2021-22

ITR filing: Last date for income tax return (ITR) filing for assessment year 2021-22 is 31st December. So, income taxpayers are advised to keep some changes made by the income tax department in mind while ITR filing. Reporting of dividend income while filing ITR is one such change that a taxpayer can’t afford to miss while filing ITR for AY 2021-22. Now, taxpayers need to give quarter-wise breakup of their dividend income. It will help them save income tax outgo.

Speaking on changes in dividend income tax that a taxpayer needs to remember while filing ITR for AY 2021-22; Amit Gupta, MD at SAG Infotech said, “Prior to the Financial Year FY21, dividend income up to ₹10 lakh in a particular year was not taxable for the taxpayers as organisations needed to pay a Dividend Distribution Tax (DDT) before making dividend payments. However, those who received dividends of more than ₹10 lakh used to pay only 10 per cent tax on the dividend payout. However, with effect from FY21, the Government has made dividends distributed by an organisation taxable.”

Advising income taxpayers to report quarter-wise breakup of dividend income while filing ITR for AY 2021-22, Mumbai-based tax and investment expert Balwant Jain said, “In order to calculate the interest for the default in payment of advance tax liability, taxpayers are now required to give a quarter-wise breakup of dividend income received in a financial year. It will help taxpayer to save is income tax outgo as taxpayers now need to pay advance tax in the quarter in which the dividend income has been gained.” Balwant Jain went on to add that even for a normal income taxpayer, if there is dividend income, it has to be reported in quarter-wise breakup otherwise their ITR form will be rejected.

Echoing with Balwant Jain’s views; Amit Gupta of SAG Infotech said, “Earlier, exclusion from interest penalty for non-payment of the advance tax on dividend income was there as it was not possible to cite dividend income in advance. It is highly likely that dividend income will be provided pre-filled to taxpayers from this year as the Income Tax department has made it compulsory for the organisations to announce the information of the dividend paid to the department. Noteworthy, if you get the pre-filled data in your ITR, you should check the information clearly.”

In order to avoid rejection of one’s ITR form, the taxpayer needs to report dividend income breakup for the span of:

1] 1st April 2020 to 15th June 2020;

2] 16th June 2020 to 15th September;

3] 16th September 2020 to 15th December 2020;

4] 16th December 2020 to 15th March 2021; and

5] 16th March 2021 to 31st March 2021.

Source: https://www.livemint.com/money/personal-finance/itr-filing-why-taxpayers-need-to-give-quarter-wise-breakup-of-dividend-income-11639818099223.html
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