The principal officer of an Indian Company or a Company which has made prescribed arrangements for the declaration and payment of dividend (including dividend or preference shares) within India liable to deduct tax in respect of this section
  

TDS is required to be deducted before making any payments in cash or before issuing any cheque or warrant in respect of any dividend or before making any distribution or payment to a shareholder, who is resident of India if any dividend is within the meaning of (e) of clause 22 of section 2.
  

Further this is to be noted that this TDS provisions are not applicable with effect from 1-4-2003 in respect of dividends referred to in section 115-O (i.e., dividend, not being covered by section 2(22) (e), from a domestic company).