Dividends

Dividends are payments made by a company to its shareholders from its profits. When a company declares a dividend, it must deduct tax at source (TDS) at 10% under Section 194 of the Income Tax Act 2025 if the dividend paid to a resident individual exceeds ₹10,000 in a financial year. The dividend is then added to your total income for the year and taxed at your applicable slab rate. If the dividend income exceeds the ₹1 lakh threshold, you must also include it in your Annual Information Statement. Some dividends from Indian companies enjoy exemption under Section 10(34) read with Section 115BDA for certain categories, but this exemption does not apply to dividends from listed shares above the ₹1 lakh limit under the new regime.