The prescribed limit to deduct TDS on dividend income is INR 5000. Sec 194K - Domestic Company should deduct TDS on dividends from mutual funds at 10% if the dividend income per recipient exceeds INR 5000 in the financial year. Sec 194 - Domestic Company should deduct TDS on dividends from equity shares at 10% if the dividend income per recipient exceeds INR 5000 in the financial year.