TDS on dividend is 10%, cut by the company under section 194 when dividends to a resident individual cross ₹10,000 in FY 2025-26. Mutual fund income under 194K follows the same 10% and ₹10,000 pattern, while lottery and game show winnings lose 30% at source.
This hub collects the sections that do not have a page of their own: dividends, mutual funds, winnings, insurance, EPF withdrawals, business trusts and the 194M catch-all for families. Each row gives the FY 2025-26 rate and limit under the 1961 Act. From 1 April 2026 the same payments sit in the one combined TDS table, section 393 of the 2025 Act. For the main business sections, start with the TDS rate chart or the basics in what TDS is.
Quick facts
Dividend (194)
10% above ₹10,000 a year per shareholderMutual fund units (194K)
10% above ₹10,000Lottery, game show (194B)
30% on a single win above ₹10,000Online games (194BA)
30% on net winnings, no limitInsurance commission (194D)
2% for agents other than companies, above ₹20,000EPF early withdrawal (192A)
10% above ₹50,000Under the 2025 Act
Covered in the TDS table under section 393
TDS on dividend under section 194
A company deducts 10% when it pays or credits a dividend to a resident shareholder. For an individual paid by bank transfer or other non-cash mode, nothing is cut if the total from that company stays at or below ₹10,000 in FY 2025-26 (the limit was ₹5,000 earlier). Non-resident shareholders fall under section 195 instead, usually at 20% plus surcharge and cess, or the treaty rate if they give a tax residency certificate.
Two shareholders, one company. Meera holds 2,000 shares and gets a final dividend of ₹6 a share: ₹12,000. That crosses ₹10,000, so the company cuts ₹1,200 and pays ₹10,800. Her brother holds 1,500 shares and gets ₹9,000, so he receives the full amount with no TDS.
A resident with no taxable income can give the company Form 15G or 15H (Form 121 for tax year 2026-27) to stop the deduction.
Tax on dividend income for individuals
The 10% is only an advance. Since FY 2020-21 dividends are taxed in the shareholder's hands at slab rates, under income from other sources. Someone in the 30% slab pays the difference when filing. Someone with income below the taxable limit claims the 10% back as a refund. Surcharge on dividend income is capped at 15%.
Report every dividend, even those below ₹10,000, because the Annual Information Statement shows them all. See AIS and Form 26AS to match the figures.
Rates and limits for the other TDS sections
| Section | Payment | Rate | When it starts |
|---|---|---|---|
| 192A | Early EPF withdrawal (under 5 years of service) | 10% | Above ₹50,000 |
| 194 | Dividend to resident | 10% | Above ₹10,000 for individuals |
| 194B | Lottery, crossword, card game, game show | 30% | Single win above ₹10,000 |
| 194BA | Online game winnings | 30% | Net winnings, no limit |
| 194BB | Horse race winnings | 30% | Single win above ₹10,000 |
| 194D | Insurance commission to non-company agent | 2% | Above ₹20,000 |
| 194DA | Taxable life insurance payout | 2% of income part | Payout of ₹1,00,000 or more |
| 194EE | National Savings Scheme withdrawal | 10% | ₹2,500 or more |
| 194G | Commission on lottery tickets | 2% | Above ₹20,000 |
| 194K | Income on mutual fund units | 10% | Above ₹10,000 |
| 194LBA | Interest or dividend from a business trust to residents | 10% | No limit |
| 194LBB | Income from an investment fund to residents | 10% | No limit |
| 194M | Contract, commission or professional fees paid by individuals and HUFs not covered by 194C, 194H or 194J | 2% | Above ₹50 lakh a year |
Without a PAN the rate generally becomes 20% or the normal rate, whichever is higher. The 194DA rate fell from 5% to 2% from 1 October 2024, and the winnings limits under 194B and 194BB now test each win separately, not the yearly total.
Winnings, insurance and PF: what readers usually ask
Lottery and game shows (194B). A quiz show prize of ₹1,00,000 loses ₹30,000 plus surcharge and cess. When the prize is a car, the organiser releases it only after the tax has been deposited. Online games (194BA). The platform cuts 30% on net winnings at withdrawal and at year end. Insurance. There is no TDS on insurance premium you pay. Agents' commission is covered by 194D, and a maturity payout that is not exempt under section 10(10D) is covered by 194DA on the income part only. PF withdrawal (192A). Taking out EPF before five years of continuous service attracts 10% if the amount exceeds ₹50,000; Form 15G or 15H stops it when your income is below the taxable limit.
Which dividend TDS section applies under the Income-tax Act, 2025
| Payment | FY 2025-26 | Tax year 2026-27 |
|---|---|---|
| Dividends, mutual fund income, winnings, insurance, EPF | Separate sections 192A to 194M | Entries in the TDS table under section 393 |
| Certificate for the payee | Form 16A | Form 131 |
| No-deduction declaration | Form 15G or 15H | Form 121 |
The search "tds on dividend as per income tax act 2025" leads to the same answer: the rule is a row in section 393, not a new numbered section. Payments up to the end of FY 2025-26 keep the old references.
All TDS pages in this group
| Page | What it answers |
|---|---|
| What TDS means | The basic idea of tax cut at the time of payment, and who carries the duty |
| Full rate chart | Every section with its rate and limit in one long table |
| Salary (192) | How an employer spreads yearly tax across monthly pay |
| Interest (194A) | Deposits and loan interest, with the ₹50,000 and ₹10,000 limits |
| Fixed deposit interest | Why a bank cut tax on your FD and how to stop it lawfully |
| Contractors (194C) | Work contracts, freight and labour at 1% or 2% |
| Commission (194H) | Brokerage and agency payments at 2% |
| Business rent (194I) | Rent for land, buildings and machinery |
| Professional fees (194J) | Doctors, lawyers, consultants and technical services |
| Buying property (194IA) | 1% when the price is ₹50 lakh or more |
| Buying from an NRI | Why section 195 replaces the 1% rule |
| Goods purchases (194Q) | 0.1% for large buyers above ₹50 lakh |
| Business gifts (194R) | Trips, gadgets and other perks given to dealers |
| Cash withdrawals (194N) | Bank deduction on cash taken out above ₹1 crore |
| Crypto transfers (194S) | 1% on transfer of virtual digital assets |
| Online marketplaces (194O) | 0.1% cut by e-commerce operators from sellers |
| Partner payments (194T) | Salary, commission and interest from a firm |
| Non-filer rates (206AB) | What happened to the higher rate for non-filers |
| TDS calculator | Work out the deduction and net amount for a payment |
| Interest on late TDS | 1% and 1.5% a month, with a calculator |
| Deadlines | Monthly deposit and quarterly return dates |
| Paying with Challan 281 | Steps to deposit the tax online |
| Filing a TDS return | Forms 24Q, 26Q and 27Q, step by step |
| TRACES | Logins, statements and corrections on the TDS portal |
| TDS certificates | Form 16A and its cousins, and the new Form 131 |
| Form 121 | The new no-deduction declaration replacing 15G and 15H |
| Getting excess TDS back | Claiming a refund through the return |
| TDS or TCS | Deduction by the payer against collection by the seller |
| GST TDS | The separate 2% deduction under GST law |
Slips people make with these sections
| Mistake | Better approach |
|---|---|
| Skipping small dividends in the return | Add every dividend from AIS, taxed at slab rate |
| Thinking 30% TDS on winnings is the final tax | It is, at the special rate, but surcharge and cess apply; no slab benefit or deduction |
| Withdrawing EPF early without PAN | Link PAN to the PF account to avoid the higher rate |
| Giving Form 15G with taxable income | Only use it when tax on total income is nil |
This hub gives general information on Indian TDS rules. Rates and limits change with each Finance Act; verify on the official portal or with a chartered accountant before relying on a figure.
Sources we checked
- Income-tax Act, 1961, sections 192A, 194, 194B, 194BA, 194D, 194DA, 194K, 194M
- Finance Act, 2025
- Finance (No. 2) Act, 2024
- Income-tax Act, 2025, section 393
Frequently asked questions
What is the TDS rate on dividend?
Companies deduct 10% on dividends to resident shareholders. For an individual, there is no TDS when dividends from that company in FY 2025-26 total ₹10,000 or less and are not paid in cash.
Is dividend income taxable for individuals?
Yes. Dividends join your other income and bear tax at your slab rate. The TDS is credited against that tax.
What is the 194K TDS section?
194K covers income on mutual fund units, such as IDCW payouts, at 10% above ₹10,000 a year. Gains on redeeming units are not covered by 194K.
What is TDS under 194DA?
194DA applies when a life insurance payout is taxable. The insurer cuts 2% on the income part, that is, the payout minus premiums paid, once the payout reaches ₹1,00,000.
Is TDS deducted on PF withdrawal?
Under section 192A, 10% is cut if you withdraw more than ₹50,000 before completing five years of continuous service. After five years, no TDS applies.
What is section 194M of the Income Tax Act?
It makes individuals and HUFs who are not under tax audit deduct 2% on contract work, commission or professional fees above ₹50 lakh in a year, for example a household paying a builder for a large house.