7 Jan 2022 , 01:17 PM
In terms of the present Assessment Year of Income Tax Returns Filing i.e AY22, several changes have been made. And, one such major change among others is reporting of dividend income. In case a taxpayer has dividend income in the last financial year, then it is required to take note of the following changes in order to ensure error-free filing of Income Tax Returns. Prior to the Financial Year FY21, dividend income up to Rs 10 lakh in a particular year was not taxable for the taxpayers as organisations needed to pay a Dividend Distribution Tax (DDT) before making dividend payments. However, those who received dividends of more than Rs 10 lakh used to pay only 10% tax on the dividend payout.
However, with effect from FY21, the Government has made dividends distributed by an organisation taxable. Also, the domestic firms are responsible to deduct tax at source (TDS) at 10% if the cluster charge of dividend distributed to resident shareholders crosses the amount of Rs. 5,000 in a financial year. Initially, while filing ITR, dividend income was revealed under the head ‘Exempted Income'. However, now it would appear under the head ‘Income from other sources as per section 56 (2) (i) as this income becomes taxable now. It is important to mention here that in the current ITR forms announced by the government, the schedule OS is altered to include the details of the dividend income earned by the taxpayers by this year.
Quarter-wise breakup of dividend income
In order to calculate the interest for the default in payment of advance tax liability, taxpayers are now required to give a quarter-wise breakup of dividend income received in a financial year, say tax experts. The breakup can be provided for the span of:
The author of this article is Amit Gupta, MD, SAG Infotech
The views and opinions expressed are not of IIFL Securities, indiainfoline.com
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