All the salaried taxpayers need to fill Form 12BB. It is supposed to be submitted at the beginning of every financial year by the employee to his/ her employer for the correct deduction of TDS. It discloses all their tax-saving investments of that particular financial year.
Time needed: 3 minutes
Effective from 1st June 2016, Every salaried taxpayer has to submit Form 12BB. You will also have to submit proofs/evidence to support your investments. It can help you reduce your taxable income and it also helps your employer to deduct correct TDS from your salary.
Yet in case… If you haven’t filed your Form 12BB your employer might have deducted excess TDS from your salary. But, you can claim your excess TDS while filing your Income Tax returns.
Salaried employees have to provide certain information to their employer in order to avail tax benefits while filing for Income Tax Return. There was no particular standard format before to disclose investments. But, from June 2016, Introduction of standard form 12BB has made lives easier.
What is the purpose of form 12BB?Form 12BB serves the following two purposes:
1. Helps employer deduct correct TDS of an employee,
2. Helps employee determine his tax liability and make tax savings investments accordingly.
No, the form is not to be submitted to the Income-tax department. It is to be submitted to the employer.
Hey @TeamQuicko Thanks for the blog! Just one quick question - Why do we have to report a quarterly breakdown of Dividend Income under IFOS? Thank you!
Yesha says:
Hey @TanyaChopra This quarterly breakdown of Dividend Income under IFOS will help to calculate and determine penalty u/s 234C for the delay in payment of Advance Tax. Learn by Quicko – 2 Apr 21
Advance tax is to be paid on an installment basis. Failing to pay Advance Tax shall attract penalty under Section 234C. Read more about it. Estimated reading time: 4 minutes
HarshitShah says:I had received dividend recently but I had noticed that TDS had been deducted. any idea as to why has it happened and is there a way I can claim this TDS?
Yesha says:
Hey @HarshitShah After the introduction of Budget 2020, dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website. Learn by Quicko – 15 Jul 21
In Budget 2020, DDT is abolished and thus dividend income is taxable. TDS under section 194 has to be deducted on payment of dividend from Equity Shares. Estimated reading time: 4 minutes
Learn by Quicko – 21 Jun 21
In Budget 2020, DDT is abolished and thus dividend income is taxable. TDS under section 194K has to be deducted on payment of dividend from Mutual Funds. Estimated reading time: 4 minutes
Hope this helps! Yesha says:
Hey @HarishMehta Yes, dividend income is now taxable from FY 2021-22 onwards and it has to be reported under the head of IFOS. You can read more about it here: Learn by Quicko – 11 May 21
On the abolishment of DDT in Budget 2020, shareholder needs to pay tax on dividend income on from equity shares & equity mutual funds. Estimated reading time: 5 minutes
Nireka says:
Hi @Maulik_Padh, You need to pay Income tax on the net taxable income, i.e. after subtracting deductions, expenses, etc.
If the net taxable income is negative i.e. if there is loss, you can carry it forward when filing the ITR Here are some of the articles which might help Learn by Quicko – 11 Oct 21
Read Income Tax Rules and tabular summary to set off losses against taxable income and carry forward remaining loss against incomes in future years Estimated reading time: 9 minutes
Learn by Quicko – 9 Aug 21
Here is a list of expenses a trader can claim against income from trading to reduce the taxable income. It includes STT, CTT, rent, etc. Estimated reading time: 6 minutes
Divya_Singhvi says:
Hi @ameyj The amount of TDS deducted shall reflect in your Form 26AS only and it will also reflect the name of the deductor.
Using the name of the deductor you can find out on which share you have received the dividend and you can also cross-check the same in your bank statement. Yes, you are right, TDS is to be deducted when the dividend paid exceeds 5000 INR in a financial year. However, the 5,000 INR limit pertains to all the dividends an individual gets in a year, or the total dividend per shareholder that a company pays out in a year, is left to interpretation, and hence registrars and share transfer agents (RTA) are not taking any chances and are deducting TDS even on small amounts. Learn by Quicko – 11 May 21
On the abolishment of DDT in Budget 2020, shareholder needs to pay tax on dividend income on from equity shares & equity mutual funds. Estimated reading time: 5 minutes
Divya_Singhvi says:Hi @ameyj You can submit a grievance on Income Tax Portal mentioning the issue and also attach the 26AS.
The other option is to leave it as it is and clarify it when the tax department sends the notice.
Hi @TeamQuicko Consider that I have 10 shares each of 10 different Indian companies. Each of the 10 companies are declaring a dividend of INR 100 before the FY ends. Now I will be recieving 1000 as dividend from each company, thereby a total of 10,000. The 5,000 dividend limit, is it applicable to each company / total dividend recieved by me in a year. If it is applicable to each company, then I would not attract TDS of 10% for dividend. Also pl clarify, how would the company B know that I have got shares of Company A,C,D,E so on…
