In this article, we will see how to show dividend income in ITR. So let’s get started.
Any income by way of dividend received from a company, whether domestic or foreign, is taxable in the hands of shareholders at normal rates of tax.
However, dividend distributed by a domestic company before 1.04.2020 and received by shareholders on or after 1.04.2020 and on which dividend distribution tax under section 115-O*, if applicable, has been paid would be exempt in the hands of shareholders except dividend chargeable to tax under under section 115BBDA.
* Upto F.Y 2019-20, domestic company was liable to pay additional Income tax U/s 115-O @ 15% [30%, in respect of deemed dividend u/s 2(22)(e)] on dividend distributed by it, consequent to which dividend was exempt in the hands of shareholders U/s 10(34) except dividend chargeable to tax U/s 115BBDA.
Tax on certain dividends distributed by the domestic companies before 1.04.2020 but received on or after 1.04.2020 [Section 115BBDA]
(I) any income by way of aggregate dividend in excess of ₹ 10 lakh distributed by domestic companies before 1.04.2020 but received on or after 1.04.2020 shall be chargeable to tax in the case of specified assessee who is resident in India, ate the rate of 10% [further increased by surcharge, if applicable and health and education cess @4%].
(II) Meaning of certain terms:
1. Specified assessee: A person resident in India, other than
- Domestic company
- A fund or institution or turst or any university or other educational institute or any hospital or other medical institute refered to in section 10(23C)(iv)/(v)/(vi)/(via)
- a trust or institute registered under section 12A or 12AA
2. Dividend includes dividend referred under section 2(22)(a) to (d) but shall not include sub-clause (e) thereof.
3. The taxation of dividend income in excess of ₹ 10 lakh shall be on gross basis i.e., no deduction in respect of any expenditure or allowance or set-off loss shall be allowed to assessee in computing the income by way of dividends.
Steps to Show Dividend income in ITR 1
Visit the e-filing portal
Login to account with your credential now enter the user ID: PAN or Aadhar and click on the continue button. Tick the please confirm the secure access, enter the password, and click on the continue button.
Now you are on your e-filing account dashboard. Click on the “File Now” button
Select the Assessment Year (for e.g.as the current assessment year 2021-22) then click on the continue button
Please select the status applicable to you to proceed further: Select the individual click on the “Continue” button
After that, You need to choose an ITR Form to proceed
Now please answer the following questions to proceed further: Are you filing the income tax return for any of the following reasons?
Tick the applicable case, In normal case it is : Taxable income is more than basic exemption limit tick on that and click on the “Continue Button”]
Now the popup will come “We have pre-filled your return based on information available with the Income Tax Department. Please confirm that the details in each section are correct to proceed.” Click on the “OK” button.
fill the Personal Information and confirm the same.
Gross Total Income
To show dividend income go to
Income from other sources (If you have any other source of income, please add it here.)
Click on the “Add details” button and select the “Yes” option in “Do you have dividend income?” It will look like the below image
Fill the quarterly break up of dividend income (You may refer to the entries in bank statement for details or you may refer to the trading account statement provided by your broker and also refer to 26AS or AIS from income tax portal ) and click on the continue button.
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