Section 194

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 preference 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 share-holder 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 ³[* * *] at the rates in force :

⁴[Provided that no such deduction shall be made in the case of a shareholder, not being a company, if—

(a) the shareholder is resident in India ;

(b)the amount of such dividend or 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 or section 8 will be less than the minimum liable to income-tax :]

^*Provided ¹[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 ²[* * *] 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.

 

 

 

[AS AMENDED BY THE FINANCE ACT, 1982]