Amendment to Section 194 exempts TDS on dividends under 250 rupees for resident individual shareholders with low income.

Section 194 of the Income-tax Act was amended by the Finance (No. 2) Act, 1977, effective October 1, 1977. The amendment introduced a proviso stating that no tax deduction at source is required for dividends paid to individual shareholders, excluding companies, if the shareholder is a resident of India, the dividend does not exceed 250 rupees, and the shareholder provides a written statement in the prescribed form declaring their estimated total income for the previous year will be below the taxable threshold. This amendment aims to simplify tax compliance for small dividend earners.

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