Deduction of tax at source from Interim Dividend

The Board of Directors of the Company at the Meeting held on 11th February, 2021, have declared Interim Dividend of Rs. 5.00 per Ordinary Share of Re. 1/- each for the financial year ending on 31st March, 2021. The said dividend will be paid to the shareholders entitled thereto on 10th March, 2021.

In terms of the Income-tax Act, 1961 read with the Finance Act, 2020, payment of dividend by the Company, effective 1st April, 2020, is taxable in the hands of the shareholders. The Company will be therefore required to deduct tax at source (TDS), as applicable, from the aforesaid Interim Dividend, in the manner following:

 

I. Resident Shareholders

TDS will be deducted @ 7.5% on the amount of dividend payable where a valid Permanent Account Number (PAN) has been furnished by the concerned resident shareholders to their respective Depository Participants (in case shares are held in dematerialised form) or to the Investor Service Centre (ISC) of the Company (in case shares are held in certificate form). In the absence of a valid PAN, TDS will be deducted @ 20%.

Shareholders who are yet to furnish their PAN to their respective Depository Participants / ISC are therefore requested to do so immediately.

No TDS, however, will be deducted from dividend payable to:

(A) Individual Shareholders, if:-

  • the amount of dividend paid / payable during the current financial year does not exceed Rs. 5,000/-, or
  • their income is below the taxable limit and a declaration specifically for the Interim Dividend has been received from the concerned shareholders in Form 15G (for persons up to age of 60 years) or in Form 15H (for persons above the age of 60 years).

(B) Insurance Companies (viz. LIC, GIC etc.), Mutual Funds and Alternative Investment Funds (incorporated in India) and other non-individual shareholders, upon receipt of the following documents from them:

 

Category of Shareholders Documents required
Insurance Companies
  1. A self-declaration that they are covered by the second proviso to Section 194 of the Income-tax Act, 1961 and has full beneficial interest with respect to the shares owned by it;
  2. Self-attested copy of registration certificate; and
  3. Self-attested copy of PAN.
Mutual Funds
  1. A self-declaration that they are governed by the provisions of Section 10(23D) of the Income-tax Act, 1961;
  2. Self-attested copy of registration certificate; and
  3. Self-attested copy of PAN.
Alternative Investment Funds (AIF)
  1. A self-declaration that the income of the AIF is exempt under Section 10(23FBA) of the Income-tax Act, 1961 and that they are governed as Category I or Category II AIF under the SEBI regulations;
  2. Self-attested copy of registration documents; and
  3. Self-attested copy of PAN.
Other non-individual resident shareholders
  1. A self-declaration that dividend receivable by them is exempt from tax under Section 196 or other relevant provisions of the Income-tax Act, 1961; and
  2. Self-attested copies of documents in support of the claim.

II. Non-Resident Shareholders

(A) For Foreign Portfolio Investors and Foreign Institutional Investors:

TDS will be deducted @ 20% (plus applicable surcharge and cess) on the amount of dividend payable.

 

(B) For other non-resident shareholders:

TDS will be deducted @ 20% (plus applicable surcharge and cess) or the Tax Treaty Rate, whichever is lower, on the amount of dividend payable, except where requisite documents [viz. self-attested copy of Tax Residency Certificate (TRC), Form 10F etc.) have been received from the shareholders for availing the benefit of Tax Treaty Rate.

 

Submission of Tax Exemption Forms / documents for availing benefits, as applicable

The last date for submission of Form 15G, Form 15H, TRC, Form 10F etc., for the purpose of the Interim Dividend was 23rd February, 2021. Documents received after 23rd February, 2021 and / or incomplete documents will not be considered.

In the event the benefit of lower tax on dividend cannot be provided by the Company in the absence of, or due to late receipt of, the aforesaid documents, shareholders will still have an option to claim appropriate refund, if eligible, at the time of filing their income tax returns. No claim shall lie against the Company for taxes once deducted.