Section 194 – Dividends Union Budget 2025-26 (Full) + Finance Bill, 2025 - Finance Bill

Union Budget 2025-26 (Full) + Finance Bill, 2025 Section 194 Dividends Section 194 of the Act requires that the principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment by any mode in respect of any dividend or before making any distribution or payment to a shareholder, who is resident in India, of any dividend within the meaning of all sub-clauses of clause (22) of section 2, deduct from the amount of such dividend, income-tax at the rate of 10%. 2. The first proviso to this section states that no tax is required to be deducted when the amount or aggregate of amounts of such dividend, distributed or paid or likely to be distributed or paid, during the financial year by the company to the shareholder, being an individual, does not exceed Rs. 5,000/-. 3. It is proposed to provide that no tax is required to be deducted when the amount or aggregate of amounts of such dividend, distributed or paid or likely to be distributed or paid, to the shareholder, being an individual, does not exceed Rs. 10,000/-. 4. This amendment will take effect from the 1st day of April 2025. [Clause 52] Full Text : Union Budget 2025-26 (Full) + Finance Bill, 2025