Income Tax: Under Section 139 of the Income Tax Act, if a person’s total taxable income exceeds the exemption limit before claiming deductions, then he is required to file Income Tax Return (ITR). Even if the income is less than this limit, a person can voluntarily file a return
Investing in shares gives dividend. If the total income of a taxpayer is less than the exemption limit, then TDS can be deducted on it. In such a situation, it is necessary for the taxpayer to claim refund. He will get the TDS money back only after the claim. The question is what is the method of claiming refund? Moneycontrol spoke to tax expert Balwant Jain about this.
Jain said that under section 139 of the Income Tax Act, if a person’s total taxable income exceeds the exemption limit before claiming deduction, then he is required to file Income Tax Return (ITR). In the old regime of income tax, this exemption limit is Rs 2.5 lakh for a person below 60 years of age. It is Rs 3 lakh for a person aged 60 to 79 years. For a person aged 80 years and above, i.e. super senior citizens, it is Rs 5 lakh.
In the new income tax regime, the basic exemption limit is Rs 3 lakh for all people. If a person’s income is less than this limit, then it is not necessary for him to file income tax return. However, he can voluntarily file ITR. If tax has been deducted from your income, but your total income is less than the exemption limit, then you will have to file ITR for refund of TDS.
He said that we can easily understand this with the help of an example. Suppose a person has shares of a listed company, from which he has received a dividend of Rs 70,000 in the last financial year. TDS of Rs 2,500 has been deducted on this dividend income. But, his total income is less than the exemption limit. In such a situation, he will have to file income tax return for refund of TDS.
There is a fixed rule for TDS on dividend income. If a person receives more than Rs 10,000 dividend from a company in a financial year, then TDS will be deducted on it. If that person wants that TDS should not be deducted on his dividend income, then he will have to submit Form 15G to every company from which he is expected to receive dividend. Form 15G is for a person whose age is less than 60 years. If the person is more than 60 years of age, then he will have to submit Form 15H.
After submitting this form, the company will pay dividend to the person without deducting TDS. Taxpayers should submit this form at the beginning of the year. This will prevent the company from deducting TDS on their dividend income. It is important to keep in mind that you have to submit this form to every company from which you expect to receive dividend.
Disclaimer: The views expressed by experts on Businessleague are their own views. These are not the views of this website or its management. Businessleague advises users to seek the opinion of certified experts before taking any investment decision.
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