Big news has come for those investing in the stock market. Tax expert Sharad Kohli told the CNBC voice that Section 194:- The range of TDS has been changed on the dividend received by individual share holder. According to the budget provision, now TDS will be imposed on dividend of more than 10 thousand rupees instead of 5 thousand rupees annually.
You can understand something like this
The boundary of TDS has been increased on the income from dividend. Earlier, if a person had a dividend of more than ₹ 5,000 annually from a company, then TDS was applied to it. In budget 2025, this limit has been increased to ₹ 10,000. Now, TDS will be deducted only at an annual dividend of more than ₹ 10,000.
Common investors will get great relief
This change will benefit small investors, because now they will not have to pay TDS on dividend up to ₹ 10,000, which will improve their cash flow.
What was happening before the government’s announcement
If a person gets a dividend of more than ₹ 5,000 in a financial year from a company or mutual fund, then it had to pay tax TDS at the source. Under Section 194 of the Income Tax Act, TDS is deducted at a rate of 10% at a dividend of more than ₹ 5,000. If you do not have your own PAN, the rate of TDS increases to 20%. To avoid cuts cuts-the total income is within the tax-free limit, then you are Form 15G (Non-Guest Citizen) or Form 15H (Senior citizens) can avoid deduction by depositing TDS. Dividend is involved in total income and tax is levied according to the income tax slab rates applicable to it. For example, if your total income is more than ₹ 10 lakh, dividend income will be taxed at a rate of 30%.