<h1>TDS on Mutual Fund dividends applies to dividend payments; no TDS required on capital gains on redemption.</h1> The Finance Bill proposes removal of Dividend Distribution Tax, shifting dividend taxation to shareholders and requiring payers to deduct TDS on dividend payments above the statutory threshold. The CBDT clarifies that a Mutual Fund must deduct TDS only on dividend payments at the prescribed rate and is not required to deduct tax on income that is capital gains on redemption of units.