Dividends are a share of a company's profits paid to shareholders. The way they are taxed depends heavily on your country and your total income.
United States
Qualified Dividends: Taxed at long-term capital gains rates (0%, 15%, or 20%), which are generally lower than regular income tax rates.
Ordinary Dividends: Taxed as ordinary income at your regular tax bracket.
India
Dividends are taxable in the hands of the investor. They are added to your total income and taxed at your applicable slab rate. A TDS of 10% is deducted if the dividend exceeds ₹5,000.
United Kingdom
You get a tax-free dividend allowance (£500 for 2024/25). Above that, you pay tax based on
your income band:
Basic rate: 8.75%
Higher rate: 33.75%
Additional rate: 39.35%