Dividend Payout and TDS Defined: What You Have to Know [Calculator]

Dividend TDS Calculator

Introduction

Bought an e-mail just lately about an organization I maintain shares in. Might and June is the month the place shareholders get plenty of dividend intimation emails from the businesses (Firm’s Registrar & Share Switch Agent – RTA) of which we maintain shares.

It’s in regards to the dividend they’re planning to offer out.

And likewise about how tax can be deducted on it. Thought it could be helpful to share what I understood from by studying this e-mail.

So, the corporate’s board has steered a dividend of Rs.20 per share. That is for the monetary 12 months that simply led to March 2025.

For this type of transaction, the shareholders want to offer their approval on the Annual Normal Assembly (AGM). The AGM is scheduled for July 15, 2025.

If the whole lot goes as deliberate, those that maintain the shares on the file date, which is July 8, 2025, will get this dividend.

You’ll obtain it both immediately in your financial institution in case your shares are in demat kind, or via different means for those who maintain bodily shares.

Now, the opposite vital half is taxes.

As per the earnings tax guidelines, any dividend given after April 1, 2020, is taxable in your arms. Due to this, the corporate has to deduct tax at supply (TDS) earlier than they pay you the dividend.

The speed of TDS is determined by a number of issues.

1. Resident Shareholders

If you’re a resident shareholder, that means you reside in India, the TDS charge is often 10%. However that is solely in case you have given your Everlasting Account Quantity (PAN) and it’s legitimate of their information.

In the event you haven’t offered your PAN, or if it’s not validly registered together with your demat account, the TDS can be increased, at 20%.

So, it’s essential to ensure your PAN particulars are updated.

Nevertheless, there are some instances the place no tax can be deducted for resident people.

• One is that if the full dividend you might be anticipated to obtain throughout the complete monetary 12 months (2025-26) shouldn’t be greater than Rs.10,000.
• One other method to keep away from TDS is by submitting Type 15G (for those who are or under 60 years previous) or Type 15H (if you’re above 60 years previous). These are principally declarations that your complete earnings is under the taxable restrict. However be sure to meet all of the circumstances and fill the varieties appropriately. The corporate can reject them if they aren’t correctly stuffed.
• For some resident non-individual shareholders, like insurance coverage firms or mutual funds, there could be no TDS both, offered they submit sure declarations and paperwork. This often includes proving their particular standing and offering their PAN and related registration particulars. It looks as if a little bit of paperwork, however it could prevent from speedy tax deduction.
• And naturally, in case you have a certificates from the Revenue Tax Division that permits for a decrease or zero charge of TDS, it’s essential to present that together with a declaration.

2. Non-Resident Shareholders

For these of you who’re non-resident shareholders – NRI varieties, together with International Portfolio Buyers (FPIs), the tax guidelines are a bit completely different.

The corporate should withhold tax as per Indian tax legal guidelines. The tax charge is mostly about 20% (plus any relevant surcharge and cess).

Nevertheless, there’s a superb factor right here.

If India has a Double Tax Avoidance Settlement (DTAA) with the nation the place you’re a tax resident, and if the phrases of that settlement are extra useful to you, you possibly can select to be ruled by these DTAA guidelines.

However to do that, you’ll must present a number of paperwork.

• These embody a self-attested copy of your PAN (in case you have one)
• A Tax Residency Certificates out of your nation. It is going to be a stuffed Type 10F, and a self-declaration stating that you simply meet the DTAA eligibility and are the useful proprietor of the shares.
• International Portfolio Buyers additionally want to offer a copy of their SEBI registration.

It’s vital to notice that the corporate isn’t routinely obligated to use the DTAA charges. They are going to achieve this solely after they’ve reviewed the paperwork you present and are glad with them.

So, ensure that to get all of your paperwork so as.

3. Key Dates and Issues to Keep in mind

The file date to be eligible for the dividend is Tuesday, July 8, 2025.

If it’s essential to submit Type 15G/15H or different tax-related paperwork, you need to do it on-line via the hyperlink offered by the corporate (within the e-mail). The final date for submission is Friday, July 4, 2025.

They’re very clear that any submissions after this date gained’t be thought-about for the TDS calculation.

Additionally, they gained’t settle for these paperwork by way of e-mail, so the web hyperlink is the best way to go.

4. Preserving Particulars Up to date

The e-mail additionally reminds everybody to maintain their private particulars updated.

In the event you maintain shares in demat kind, it’s essential to replace the next particulars with the Depository Participant:

• PAN,
• E mail deal with,
• Checking account particulars, and so on.

In case you have bodily shares, it’s essential to present this info to the corporate’s Registrar and Share Switch Agent. That is vital in order that the dividend will get credited to the right account and also you obtain all communications correctly.

They’ve additionally talked about that they’ll deduct TDS based mostly on the data they’ve on file. So, in case your particulars are usually not up to date, you may find yourself with a increased TDS. In that case, you’d must declare a refund while you file your earnings tax return.

The corporate gained’t be accountable for any extra tax deducted attributable to incorrect or lacking info.

Lastly

So, there you’ve gotten it.

A breakdown of the dividend announcement and the tax implications. It appears like a reasonably simple course of, but it surely’s all the time good to pay attention to the small print, particularly the deadlines for submitting any varieties to keep away from increased TDS.

Hope this publish was assist fund. I although to jot down this explanatory weblog publish explaining what particulars are talked about in an dividend intimation e-mail obtained from firms.

Let me know for those who had any related experiences or have any ideas on this. For the second, you should utilize the abve dividend TDS calculator.