TDS on MF dividend (IDCW) for residents (Section 194K)

Tue, 12 May 2026 00:00:00 +0000

TDS on IDCW from mutual funds for resident investors is governed by Section 194K of the Income Tax Act 1961, introduced by the Finance Act 2020 effective 1 April 2020. Section 194K requires a mutual fund to deduct tax at source at 10% on any income (specifically IDCW – Income Distribution cum Capital Withdrawal, formerly called dividend) credited or paid to a resident investor, where the aggregate IDCW from that mutual fund scheme exceeds Rs 5,000 in a financial year. IDCW income is included in the investor’s total income under Section 56(2)(i) and taxed at the applicable slab rate; the 10% TDS is a withholding that is credited against the investor’s total tax liability.

Form 15G on WebNotes

TDS on MF dividend (IDCW) for residents (Section 194K)