Dividends
†Dividends.
194. The principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on perference shares) within India, shall, before making any payment in cash or before issuing any cheque or warrant in respect of any dividend or before making any distribution or payment to a shareholder, of any dividend within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2, deduct from the amount of such dividend, income-tax at the rates in force:
1[Provided that no such deduction shall be made in the case of any shareholder, not being a company, if—
(a) the shareholder is resident in India ;
(b) the amount of such dividend does not exceed two hundred and fifty rupees ; and
(c) the shareholder furnishes to the person responsible for paying the dividend a statement in writing in the prescribed form‡ and verified in the prescribed manner declaring that his estimated total income of the previous year in which such dividend is to be included under the provisions of section 8 will be less than the minimum liable to income-tax:]
1Provided 2[further] that where in the case of any shareholder, not being a company, the Income-tax Officer gives a certificate in writing in the prescribed manner that to the best of his belief the total income of the shareholder will be less than the minimum liable to income-tax, the person responsible for paying any dividend to the shareholder shall, so long as the certificate is in force, pay the dividend without any deduction.
1. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-10-1977.
† See rules 27, 30(1), 30A and 37(2) and Form No. 26.
‡ See Form No. 14B and rule 28A.
1. See rules 28(2) and 29 and Form No. 14.
2. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-10-1977.
[As amended by the Finance Act, 1980 and the Finance (No. 2) Act, 1980]