Reviewed by Finin2min Editorial Desk · Last reviewed 4 September 2026
Estimate taxable dividend, the limited interest deduction, income tax at the entered marginal rate and TDS credit.
Dividend inputs
Taxable dividend
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Net tax payable/(refund)
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Allowed interest deduction
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Gross tax
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Calculation guidance will appear here.
How This Is Calculated
Dividend income is fully taxable in the hands of the shareholder at their applicable slab rate (dividends are no longer tax-free as they were before FY 2020-21). Companies deduct TDS at 10% if total dividend paid to a resident shareholder exceeds ₹10,000 in a financial year (raised from ₹5,000 by Budget 2025, effective FY 2025-26). Interest expense incurred to earn dividend income can be claimed as a deduction, capped at 20% of the dividend income.
Frequently Asked Questions
Is dividend income tax-free in India?
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No, not anymore. Since FY 2020-21, dividend income is fully taxable in the hands of the shareholder at their applicable income tax slab rate — the earlier dividend distribution tax (DDT) regime that made dividends tax-free for investors was abolished.
When does TDS apply on dividend income?
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Companies must deduct TDS at 10% if the total dividend paid to a resident individual shareholder exceeds ₹10,000 in a financial year (raised from ₹5,000 by Budget 2025, effective FY 2025-26). This TDS is a prepayment credited against your final tax liability, not a final tax.
Can I claim expenses against dividend income?
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Only interest expense incurred to earn the dividend (e.g., interest on a loan taken to buy shares) is deductible, and that too capped at 20% of the dividend income received — other expenses like commission or brokerage aren't deductible against dividend income.
Source and review trail
Use the current official instrument, portal or regulator publication before acting.
Scope: Computes tax payable on dividend income (taxable in the shareholder's hands at slab rates since dividend distribution tax was abolished) and reconciles the TDS credit deducted under Section 194.
Calculation logic
Add dividend income received to the taxpayer's total income under 'Income from Other Sources', taxed at the applicable slab rate for the regime selected — dividends are no longer tax-free or subject to a separate DDT paid by the company.
Compute TDS credit: dividend payments exceeding ₹10,000 in a financial year from a single company attract TDS under Section 194 at the prescribed rate, which is available as credit against final tax liability.
Under the old regime, interest expenditure incurred to earn the dividend can be claimed as a deduction under Section 57, capped at 20% of the dividend income — the calculator applies this cap where the user enters interest expenditure and selects the old regime.
Inputs and assumptions
Dividend income is fully taxable at slab rates for both regimes — there is no exemption threshold specific to dividend income itself (the general basic exemption/rebate thresholds apply to total income as usual).
TDS credit entered should match what is reflected in Form 26AS/AIS for accurate reconciliation with the final return.
Exclusions and edge cases
Does not compute advance-tax interest (234C) that may arise specifically from unanticipated dividend income received late in the year — see the Advance Tax Interest calculator for that computation using the dividend-inclusive total income.
Foreign dividend income and applicable DTAA relief are outside the scope of this domestic-dividend-focused calculator.