Why does the email for TDS on dividend mention 7.5% instead of 10%?

As per the new TDS sections, the TDS Rate is 10% on dividend income. I have received email from my Company for deduction of TDS on dividend. Why does the email mention 7.5%?

Hey Tanya,

The Finance Minister abolished DDT under Budget 2020. She also introduced the following provisions to deduct TDS on dividends.

  • Sec 194 - A Company should deduct TDS at 10% on dividend paid on equity shares if the dividend amount exceeds INR 5,000.
  • Sec 194K - An AMC should deduct TDS at 10% on dividend paid on equity mutual funds if the dividend amount exceeds INR 5,000.

On 13th May 2020, the government slashed TDS Rates under certain sections by 25% on account of COVID-19. Thus, the TDS Rate under Section 194 (TDS on Dividend on Equity Shares) and Section 194K (TDS on Dividend on Equity Mutual Funds) was reduced from 10% to 7.5% for the remaining part of FY 2020-21.

Have you received an email for deduction of TDS on dividend - Read more here - TDS on Dividend paid in FY 2020-21