Budget 2025: Finance Minister Nirmala Sitharaman presented the budget of FY 2025-26 in Parliament today. In this budget, the government tried to take special care of all the sections of the country. Today, the Finance Minister announced a big relief for the middle class and announced to tax free income of up to Rs 12 lakh under the new tax system. Whereas there will be no tax on income up to Rs 12.75 lakh for employed people. Along with this, the government also announced to increase the limit of TDS to be recovered on dividends received by shares and mutual fund investors.
TDS will not be deducted on dividend income up to Rs 10,000
The Finance Minister announced to double the TDS limit of Rs 5000 to Rs 10,000 to Rs 10,000. That is, the TDS of Rs 1 will not be deducted on a dividend up to Rs 10,000 for investors in a year. However, 10 percent TDS will be deducted on dividend from Rs 10,000. This new rule will be applicable from April 1, 2025. Let us tell you that in the event of a dividend of more than Rs 5000, the company deducts 10 percent TDS and transfers money to investors’ account.
Understand the math of TDS cut on the dividend
For example, Ramesh has 1000 shares of ABC company. The company has announced a dividend of Rs 10 on each stock. Accordingly, Ramesh will get a total of Rs 10,000 as a dividend. Under the new rules, no TDS will be deducted on the dividend received by Ramesh. Whereas under the current rules, a total of Rs 9,000 will come to Ramesh’s bank account by deducting TDS of 10 percent (Rs 1000) at a dividend of Rs 10,000. This simply means that investors will save a lot under the new system.
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