The Statutory Brief

IT Act 1961 → 2025 / Section 194

TDS

Section 194 → Section 393

TDS on dividends paid by domestic companies

Section 194 of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 7; exclusions 393(4), Sl. No. 10

Income-tax Act, 1961Section 194

  • 10% TDS on dividends to resident shareholders
  • No TDS for individuals receiving up to ₹10,000 a year by non-cash mode
  • Exclusions for LIC, GIC, insurers, business trusts

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 7; exclusions 393(4), Sl. No. 10

  • Section 393(1), Table Sl. No. 7: 10%
  • ₹10,000 non-cash exclusion for individuals in 393(4), Table Sl. No. 10
  • Same institutional exclusions

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393; rate and threshold unchanged.

Practice notes

  • Dividends to non-residents fall under section 393(2).
  • Form 15G/15H declarations continue for eligible shareholders.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS rate on dividend under the new Income Tax Act 2025?

10% under section 393(1), Table Sl. No. 7; no TDS for individuals receiving up to ₹10,000 a year by non-cash mode.

What is section 194 called in the new Income-tax Act, 2025?

Section 194 of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 7; exclusions 393(4), Sl. No. 10 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194 under the new Income Tax Act?

Consolidated into section 393; rate and threshold unchanged.

Is section 194 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194 of the 1961 Act. Section 393(1), Table Sl. No. 7; exclusions 393(4), Sl. No. 10 of the 2025 Act applies from tax year 2026-27.

Related sections

194A→393TDS on interest other than interest on securities (FD, RD, loans)112A→198Tax on long-term capital gains from listed equity shares, equity mutual funds and business trust units (STT paid)195→393TDS on interest and other sums paid to non-residents (residual provision)