Why is it necessary for taxpayers to break down dividend income by quarter?

The deadline to file an income tax return (ITR) for the assessment year 2021-22 is December 31st. As a result, when submitting ITRs, income taxpayers should keep in mind some adjustments made by the IRS.

One such change that a taxpayer cannot afford to overlook while completing ITR for AY 2021-22 is the reporting of dividend income. Taxpayers must now break down their dividend income by quarter. It will assist them in reducing their income tax liability.

 “Changes in dividend income tax that a taxpayer needs to remember while filing ITR for AY 2021-22,” “Dividend income up to ten lakh rupees in a single year was not taxable for taxpayers prior to the Financial Year FY21 because organizations had to pay a Dividend Distribution Tax (DDT) before making dividend payments. Those who got dividends of more than ten lakh rupees, on the other hand, used to pay only ten percent tax on the dividend payout. The Government, however, has made dividends distributed by an organization taxable beginning in FY21.”

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 Income taxpayers to report quarter-by-quarter breakup of dividend income when filing ITR for AY 2021-22 “Taxpayers must now provide a quarter-by-quarter breakdown of dividend income received in a financial year in order to calculate interest for failure to pay an advance tax liability. It will assist taxpayers in reducing their income tax liability, as taxpayers must now pay advance tax in the quarter in which dividend income is received.

The Internal Revenue Service is urging taxpayers to file ITRs before the December 31 deadline.

” Even for a regular income taxpayer, if there is dividend income, it must be declared in quarter-by-quarter split, or their ITR form would be rejected.

To prevent having one’s ITR form rejected, the taxpayer must state the following dividend income breakup:
  •  From April 1st to June 15th, 2020;
  •  From June 16th to September 15th, 2020;
  •  From September 16, 2020, through December 15, 2020;
  •  From December 16, 2020, to March 15, 2021; and
  •  From March 16th to March 31st, 2021.