Budget 2025: Dividend Distribution Tax - What it was & how it's taxed now

Dividend taxation in India underwent a significant change starting in FY21. Previously, companies paid a dividend distribution tax, exempting individual investors earning up to ₹10 lakh in dividends annually. Now, dividends are fully taxable for investors, with companies deducting a 10% TDS if dividend income exceeds ₹5,000 in a financial year.