Why have I received lesser dividend than I should have?
The dividend amount is reduced by the applicable TDS(Tax deducted at source) rate before crediting it to your bank account. You may not have accounted for the TDS on dividends. The dividend on equity shares and equity mutual funds are subjected to TDS at the rate of 10% if the dividend amount exceeds Rs. 5000.
However, the TDS rates can be different in the following scenarios:
- If the company (or the appointed RTA) doesn't have your PAN in their records, TDS is deducted at a 20% rate.
- In the case of a Non-Resident shareholder, TDS is deducted at a 20% rate (plus surcharge and cess).
- If you have filed Form 15G or 15H with the company you invested in, TDS is deducted at a lower or NIL rate.
The TDS paid on dividends forms part of your tax paid for the financial year.
For more details, you can read this blogpost from Quicko.
- Dividends declared before May 16th, 2021, might be credited to your trading account after debiting TDS if you had sold your holdings on the ex-date or record date or had it pledged. If the TDS is deducted, the credit will be updated against your PAN. From May 16th, 2021, you will receive the direct benefit of the corporate action from the company even if you have sold your holdings on the ex-date/record date or had it pledged.