Do you have to pay withholding tax on capital gains on shares, dividends?

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While we file an income tax return (ITR) for the previous fiscal year to settle the tax payable or claim a refund, withholding tax kicks in in the year in which you earn income. In accordance with income tax rules, withholding tax must be paid by any taxpayer, including salaried employees, whose tax payable is Rs 10,000 or more after paying the TDS, TCS or credit. MAST.

However, the elderly, who reside in India and have no income from business or profession, do not have to pay tax upfront.

Now that many people invest in the stock markets and realize capital gains and also reap dividends, it is common to wonder if they should pay any withholding tax. It is important to understand here that withholding tax is paid when you can earn income. However, in the case of capital gains or dividends, it is difficult to estimate the gains in advance. Therefore, experts say that withholding tax on such income should only be made on the applicable due date after receiving the income receipt. If no deposit is due, a taxpayer can pay tax no later than March 31 of the fiscal year concerned.

READ ALSO | Can you claim HRA income tax allowance if you live with relatives while working from home?

Prepayment of tax due dates

Taxpayers must pay withholding tax in four installments per year. The four due dates (if not extended for any reason) for withholding tax payment in one year are:

  1. No later than June 15: up to 15% of tax payable
  2. No later than September 15: up to 45% of tax payable
  3. By December 15 at the latest: up to 75% of the tax payable
  4. By March 15 at the latest: up to 100% of the tax payable

For example – The next due date is December 15th. Thus, if a person is liable for withholding tax, he must pay up to 75% of his tax payable on that date.

Prepayment of taxes can be made at


If a person does not pay withholding tax on time, he has to pay an amount of interest under Articles 234B and 234C. However, if a person has paid 100% of their contributions by March 15, they would not have to pay any tax when filing the ITR. As the income tax department would adjust the withholding tax you paid against the total amount of tax payable. In the event of a difference between the tax payable and the tax paid, the taxpayer will have to pay the balance as well as the interest.

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