Haven’t Submitted PAN Yet? You Have to Pay Tax on the Earnings, 4 Points to Get Relief


If you invest in stocks or mutual funds of companies, then there is a shocking news for you. From April 1, 2020, dividend distribution tax (DDT) on earnings from dividends of shares and mutual funds has been abolished.

According to this new rule applicable from April 1, now investors will have to pay tax on the earnings from dividends of mutual funds and domestic companies. This means that the dividend you get from this type of investment will be added to the total earnings. On this you will have to pay tax according to the income tax slab. The recovery of this tax will be in the form of tax deducted at source (TDS). In such a situation, it is very important to know how you can get relief from tax payment on the dividend you get from such investment.

1. Excess income of more than five thousand will be taxed

If an investor domiciled in the country earns up to Rs 5,000 from dividends of mutual funds and shares, then he will not have to pay TDS, but if the dividend earnings exceed Rs 5,000, the investor will get 10% TDS will have to be paid at the rate.

2. Such relief from TDS payment

An investor can get relief from TDS on the dividend earnings of shares and mutual funds only if they submit Form 15G / Form 15H along with a self-attested copy of PAN card. Form 15G or Form 15H are self-declaration forms. Some of them state that their income is less than the taxable limit. Therefore, it should be kept outside the purview of tax. The validity of 15G and 15H is only for one year.

3. 20% tax will be levied for not submitting the PAN card copy

In addition, if an investor submits only a copy of PAN card, then he will have to pay TDS at a reduced rate of 7.5 percent. At the same time, if an investor does not submit a copy of PAN card, then he will have to pay TDS at the increased rate of 20 percent.

4. NRIs will have to pay 20% tax on dividend

In addition, non-resident Indians (NRIs) who invest in the Indian stock market or mutual funds will have to pay tax at the rate of 20 per cent on dividend income. However, the tax calculation will depend on India’s agreement (DTAA) with that country. It will also be determined by which document the investor submits to get relief from tax.


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