Why is the dividend amount received lesser than what it should be?
- The dividend amount received may be lesser than expected due to the application of Tax Deducted at Source (TDS) on dividends declared by equity shares and mutual funds. A TDS of 10% will be deducted from dividends above ₹5000.
- However, the TDS rates can be different in the following scenarios:
- TDS of 20% will be applicable If the registrar (RTA) of the company doesn't have the PAN details of the investor in its records.
- TDS of 20% will be applicable for all non-resident shareholders.
- If form 15G or 15H is filed with the RTA of the company issuing dividends, TDS is deducted at a lower/NIL rate.