Dividend withholding requires domestic companies to deduct tax before distribution, covering equity and preference share dividends.

Dividend declared by a domestic company, including equity-share and preference-share dividends, is subject to tax deduction at source. The declaring domestic company must deduct tax at a uniform rate of 10%, with no minimum payment threshold. Deduction applies before distribution or payment of the dividend and prevails over the general timing rule for deduction at credit or payment. The framework expressly covers preference-share dividends, subject to the stated exception for non-deduction at source.

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