Budget 2020-21: 10% TDS on dividend from Mutual Funds

Mutual Funds

Finance Minister Nirmala Sitharaman had scrapped the Dividend Distribution Tax (DDT) in Budget 2020-21. Erstwhile DDT was paid by companies and Mutual Funds on dividend paid to shareholders and unitholders. In place of DDT, the FinMin had proposed to levy a 10% tax deducted at source (TDS) on dividend paid to shareholders or unitholders in case the annual dividend paid was higher than Rs.5000. This change led to confusion about the amount on which this 10% TDS is applicable. It was ambiguous if the 10% TDS applies only to the…

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