Dividends declared and distributed on or after April 1, 2020 are taxable in the hands of recipient shareholders. Such dividend income is subject to 10% TDS, if amount received exceeds Rs 5,000 in a year.
By CHIRAG NANGIA
Is reported dividend on shares taxable from FY 2020-21? In Form 26AS, dividend amount I received on shares are reflected and there is no TDS shown. Is TDS not deducted if dividend amount is less than Rs 5,000?
—M M Pisat
Dividends declared and distributed on or after April 1, 2020, are taxable in the hands of recipient shareholders. Such dividend income is subject to 10% TDS, if the amount received exceeds Rs 5,000 in a year. When filing ITR, you have to disclose the aggregate amount of all dividend income earned in the financial year under head ‘other sources’, the TDS so deducted (reflected in Form 26AS) shall be allowed as credit from the final tax liability.
For AY2021-22, my employer has shown gross salary as Rs 8 lakh. There is no break-up for basic/DA, HRA in Part B. Can I show salary in various parts to claim refund and file ITR-1?
—G S Nanda
You must not claim deduction/ exemption of allowances, not actually received. The true and correct particulars of income must be disclosed in ITR. In order to save tax, you may invest in tax-saving instruments. Further, for individuals, who do not receive HRA, rent paid may be claimed under Section 80GG, subject to limits and conditions specified therein.
l In ITR-2 for AY 2021-22, two types of dividends are given. Which one is applicable for dividends received from Indian shares?
Dividend income from shares of an Indian company, held as investment is taxable under the head ‘other sources’ and you shall be required to report the same under dividend income [other than (ii)] in the income tax return.
My annual salary is below Rs 50 lakh. I get long-term capital gain from mutual funds and interest from tax-free bonds and PPF. Which ITR form should I file?
For FY21, you may disclose the details of incomes earned in ITR-2. Income from long-term capital gains has to be reported under ‘Schedule CG’, interest income has to be reported in ‘Schedule OS’, i.e. income from ‘other sources’. You must report interest income from tax-free bonds and PPF in your ITR as exempt income in ‘Schedule EI’.
The writer is director, Nangia Andersen India. Send your queries to firstname.lastname@example.org