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ITR Filing: Taxpayers now need to give a quarter-wise breakup of dividend income – Here’s why

It must be famous that now taxpayers need to pay advance tax within the quarter by which the dividend is gained.

In phrases of the current Assessment Year of Income Tax Returns Filing, i.e AY22, a number of adjustments have been made. And, one such main change amongst others is reporting of dividend income. In case a taxpayer has dividend income within the final monetary year, then he/she is required to take be aware of the next adjustments so as to guarantee error-free submitting of Income Tax Returns.

Prior to the Financial Year FY21, dividend income up to Rs 10 lakh in a explicit year was not taxable for the taxpayers as organisations wanted to pay a Dividend Distribution Tax (DDT) earlier than making dividend funds. However, those that acquired dividends of greater than Rs 10 lakh used to pay solely 10% tax on the dividend payout.

With impact from FY21, nevertheless, the federal government has made dividend distributed by an organisation taxable. Also, the home corporations are accountable to deduct tax at supply (TDS) at 10% if the cluster cost of dividend distributed to resident shareholders crosses the quantity of Rs 5,000 in a monetary year.

Initially, whereas submitting ITR, dividend income was revealed underneath the pinnacle ‘Exempted Income’. However, now it might seem underneath the pinnacle ‘Income from other sources’ as per part 56 (2) (i) as this income turns into taxable now. It is vital to point out right here that within the present ITR varieties introduced by the federal government, the schedule OS is altered to embrace the small print of the dividend income earned by the taxpayers by this year.

Quarter-wise breakup of dividend income

In order to calculate the curiosity for the default in fee of advance tax legal responsibility, taxpayers are now required to give a quarter-wise breakup of dividend income acquired in a monetary year, say tax consultants.

The breakup will be offered for the span of 1st April 2020 to fifteenth June 2020, sixteenth June 2020 to fifteenth September, sixteenth September 2020 to fifteenth December 2020, sixteenth December 2020 to fifteenth March 2021 and sixteenth, March 2021 to thirty first March 2021. Moreover, this quarterly reporting is obligatory to assist the relief of advance tax penalties on dividend income.

It must be famous right here that now taxpayers need to pay advance tax within the quarter by which the dividend is gained. Earlier, exclusion from curiosity penalty for non-fee of the advance tax on dividend income was there because it was not attainable to cite dividend income upfront. It is extremely seemingly that dividend income will likely be offered pre-crammed to taxpayers from this year because the Income Tax division has made it obligatory for the organisations to announce the data of the dividend paid to the division. Noteworthy, if you happen to get the pre-crammed knowledge in your ITR, you must examine the data clearly.

(By Amit Gupta, Co-Founder and MD, SAG Infotech)

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