ITR Filing 2025: Don’t Forget to Claim Refund for TDS Deducted on Dividend Income!

If you received dividend income in FY 2024–25 and noticed that TDS (Tax Deducted at Source) was cut, even though your total income is below the basic exemption limit, you’re not alone. This is a common situation for many small investors.

Why was TDS Deducted on Dividend Income?

Under current rules, companies are required to deduct TDS if the total dividend paid to a person exceeds ₹5,000 in a financial year. This applies even if you’re not otherwise liable to pay income tax.

So, if your only income is from dividends and your total income is below the taxable limit, TDS may still be deducted.

Let’s say you earned ₹70,000 in dividend income last year and had no other major income. Since this amount is above the ₹5,000 threshold, the company would deduct ₹2,500 as TDS. But if your total income is below the exemption limit, you can claim this amount as a refund while filing your ITR.

What Are the Basic Exemption Limits for Income Taxpayers?

The basic exemption limit depends on your age and tax regime:

• Old Regime:
• Below 60 years: ₹2.5 lakh
• Age 60–79: ₹3 lakh
• Age 80 and above: ₹5 lakh
• New Regime: ₹3 lakh for all individuals

If your total income (before deductions) is below these limits, you are not required to file ITR. However, if TDS has been deducted, you must file an ITR to claim a refund.

How to Avoid TDS in Future?

If you’re unlikely to have taxable income in the future, submit:

• Form 15G (if you’re below 60)
• Form 15H (if you’re 60 or older)

You’ll need to submit these forms to each company or registrar from whom you expect to receive dividends. This prevents TDS from being deducted in the first place. Submit these at the start of the financial year for best results.

Read more: ITR Filing 2025: How Can Your Health Insurance Premium Cut Tax Bills?

Conclusion

If TDS was deducted on your dividend income despite earning below the taxable limit, don’t miss the chance to claim a refund while filing your ITR for FY25. And to avoid such deductions in the future, submit Form 15G/15H on time. It’s your money, make sure you get it back!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.