Dividend tax deduction: companies must deduct tax at source on dividends to resident shareholders, with non-cash and notified exemptions. The principal officer of an Indian company or a company with prescribed arrangements must deduct income-tax at source from dividends paid to resident shareholders before making any payment or distribution; an exception waives deduction for individual shareholders when payment is by a mode other than cash and the aggregate annual dividend does not exceed ten thousand rupees, and specified institutional holders, a business trust via a special purpose vehicle, and other notified persons are exempt from deduction.