Up until FY 2019-20, DDT (Dividend Distribution Tax) was applicable on dividend paid out by domestic company @ 15%. However, in Budget 2020 finance mister abolished DDT. Hence, from FY 2020-21 onwards, TDS needs to be deducted on the Payment of Dividend on Equity Shares of Domestic Company. TDS needs to be deducted @ 10% on payment in excess of Rs. 5,000 u/s 194 of the Income Tax Act.
e-TDS Return Form: Form 26Q needs to be filed by the Payer/ Deductor for that Quarter. And TDS needs to be deposited on or before the 7th of the next month via challan no. 281.
TDS shall be deducted at the time of:
- Crediting the sum to payee account or
- Actual payment of cash or
- Payment via cheque, draft or via any other source, Whichever is earlier.