How-to TDS claim Section 194K IDCW

How to claim TDS on mutual fund dividend in ITR

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Claiming TDS on MF dividend in ITR is straightforward when Form 26AS / AIS are reconciled with AMC IDCW statements. Section 194K TDS deducted by AMCs is your tax pre-payment; it offsets your total tax liability in ITR.

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Step-by-step procedure

See the procedure infobox above.

Section 194K mechanics

AspectDetail
Triggering incomeMF IDCW (dividend)
Threshold per AMC per FYRs 5,000 (with PAN)
Rate above threshold10% (with PAN), 20% (without PAN)
Who deductsAMC at the time of IDCW distribution
Form for reporting26AS, AIS
ITR claimAuto-credit against tax liability
RefundIf TDS > tax, refunded

Worked example

FY 2024-25 IDCW from 3 AMCs:

  • AMC A: Rs 8,000 (TDS Rs 800).
  • AMC B: Rs 3,000 (no TDS, below threshold).
  • AMC C: Rs 12,000 (TDS Rs 1,200).

Total IDCW: Rs 23,000. Total TDS: Rs 2,000.

Investor at 30% slab:

  • Tax on Rs 23,000: Rs 6,900 (slab) + cess.
  • Less TDS Rs 2,000: Rs 4,900 + cess residual.

If at 5% slab:

  • Tax on Rs 23,000: Rs 1,150.
  • TDS Rs 2,000.
  • Refund: Rs 850 + cess differential.

When TDS isn’t deducted

ReasonWhat to do
Below Rs 5k threshold per AMCNo TDS deducted; declare IDCW in Schedule OS; pay slab-rate tax on total
No PAN with AMCTDS at 20% (penalty rate); link PAN urgently
Form 15G/15H filed (low income)No TDS; declare in ITR with self-certification

Discrepancy resolution

If Form 26AS shows different TDS than AMC’s statement:

  1. Contact AMC to issue corrected Form 16A.
  2. Verify TAN matches.
  3. Request 26AS rectification (rare; usually 26AS = source).
  4. If unresolved: file ITR with AMC’s figures + grievance.

NRI special case

For NRI investors:

  • TDS under Section 195 (not 194K).
  • Rate: 20% on IDCW.
  • DTAA may reduce rate.
  • Form 15CA/15CB for repatriation.

See also

External references

References

  1. Income Tax Act, 1961, Section 194K.
  2. Income Tax Act, 1961, Section 195 (NRI TDS).
  3. CBDT clarifications on Section 194K.
  4. Finance Act, 2020 (DDT abolition + 194K introduction).

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