How Are Dividend Income Taxes Managed in 2023?

Summary

The blog explains the taxation of dividend income, emphasizing the transition after the 2020 Finance Act, which shifted the tax burden from companies to individual investors. It covers TDS implications, allowable deductions, and special considerations for foreign dividends including double taxation relief. Overall, it serves as a guide for understanding updated dividend tax rules.

Key Takeaways

Tax liability for dividends shifted from companies to individual investors in 2020.
TDS is applicable on dividend income, with specific rules for residents and non-residents.
Interest expense deduction is capped at 20% of dividend earned.
Additional documentation and relief options are available for foreign dividends to avoid double taxation.