TDS on Final Dividend and Special Dividend
for the financial year 2022-23

Deduction of tax at source from the Final Dividend and the Special Dividend for the financial year ended 31st March, 2023

The Board of Directors of the Company ('the Board') at the Meeting held on 18th May, 2023 have recommended Final Dividend of Rs. 6.75 and Special Dividend of Rs. 2.75 per Ordinary Share of Re. 1/- each for the financial year ended 31st March, 2023, aggregating Rs. 9.50 per Ordinary Share, subject to declaration of the same by the Members at the ensuing 112th Annual General Meeting of the Company; such Dividend, if declared, will be paid between 14th August, 2023 and 17th August, 2023.

Together with the Interim Dividend of Rs. 6/- per Ordinary Share declared by the Board on 3rd February, 2023, the total Dividend for the financial year ended 31st March, 2023 would be Rs. 15.50 per Ordinary Share of Re. 1/- each.

Pursuant to the Income-tax Act, 1961, dividend income is taxable in the hands of the shareholders and the Company will be deducting tax at source (TDS), as applicable, from the aforesaid Final Dividend and Special Dividend.

 

I. Resident Shareholders

TDS will be deducted @ 10% on the amount of dividend payable where a valid Permanent Account Number (PAN) has been furnished by the 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).

TDS will be deducted @ 20% i.e. at twice the applicable rate on the amount of dividend payable where the resident shareholders:

  1. have not furnished valid PAN; or
  2. have not linked PAN with their Aadhaar, where applicable. The last date for linking PAN with Aadhar is 30th June, 2023 (unless extended further) as stipulated by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India; or
  3. are considered to be 'Specified Person' under Section 206AB of the Income Tax Act, 1961.

    The Central Board of Direct Taxes (CBDT) has prescribed the functionality for determining whether a person fulfils the conditions of being a 'Specified Person' or not. Accordingly, the Company will verify from the above functionality provided by CBDT whether any Shareholder of the Company qualifies as a 'Specified Person' prior to applying the relevant TDS rates.

    A resident shareholder qualifies as 'Specified Person' if he / she has:
    1. not filed return of income for the assessment year relevant to the previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing of return of income under Section 139(1) of the Income-tax Act, 1961 has expired; and
    2. been subjected to tax deduction / collection at source aggregating to Rs. 50,000/- or more in the aforesaid previous year.
    TDS will be deducted under Section 206AB of the Income Tax Act, 1961 @20% i.e. at twice the applicable rate on the amount of dividend payable to a resident shareholder who qualifies as 'Specified Person'.

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 payable by the Company during a financial year in the aggregate does not exceed Rs. 5,000/-, or
  • their income is below the taxable limit and declaration is received by the Company from the shareholders in Form 15G (for individuals up to age of 60 years) or in Form 15H (for individuals above the age of 60 years).
Click here to download Form 15G
Click here to download Form 15H

(B) Insurance Companies (viz. LIC, GIC etc.), Mutual Funds and domestic Alternative Investment Funds, where the following documents, complete in all respects, are received by the Company 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

TDS will be deducted @ 20% (plus applicable surcharge and cess) or the Tax Treaty Rate, whichever is lower, on the amount of dividend payable to Foreign Portfolio Investors, Foreign Institutional Investors and other non-resident shareholders.

For availing the benefit of Tax Treaty Rate, the shareholders will be required to submit the following documents to the Company complete in all respects.

 

  1. Self-attested copy of Indian Tax Identification Number (PAN), if any;
  2. Self-attested copy of Tax Residency Certificate (TRC), covering the financial year 2023-24, issued by the tax authorities of the country of which the shareholder is a tax resident;
  3. Form 10F, for the financial year 2023-24, duly filled up and signed;

    Click here to download Form 10F

    Pursuant to Notification No. 03/2022 dated 16th July 2022 of the Central Board of Direct Tax ("CBDT"), Form 10F is required to be obtained electronically by the Foreign Shareholders, having Permanent Account Numbers (PAN), through the e-filing portal of the Income Tax website. However, in terms of the CBDT Notifications dated 12th December, 2022 and 28th March, 2023, non-resident taxpayers not having PAN and also not required to have PAN as per the relevant provisions of the Income Tax Act, 1961 have been exempted from the mandatory electronic filing of Form 10F till 30th September, 2023. Therefore, such category of taxpayers may furnish Form 10F in manual mode till 30th September 2023.

    PROCEDURE FOR ELECTRONIC SUBMISSION OF FORM 10F

    1. Login to https://www.incometax.gov.in/iec/foportal using PAN login.
    2. Go to E-file>Income Tax Forms>File Income Tax Forms.
    3. Select Form 10F.
    4. Select the relevant Assessment Year for which you need to file Form 10F and click on continue.
    5. Fill all the required fields in the Form.
    6. Attach the Tax Residency Certificate and Save the Draft and then Proceed to submit the Form with digital signature (DSC) of the authorized signatory.
    7. Go to "View Filed Forms" and download the copy of the Form 10F and submit to the Company along with other tax forms.
  4. A self-declaration primarily covering the following:
    • that the non-resident shareholder is eligible to claim the benefit of the respective Tax Treaty in the financial year 2023-24;
    • that the non-resident shareholder receiving the dividend income is the beneficial owner of such income; and
    • that the dividend income is not attributable / effectively connected to any Permanent Establishment (PE) or Fixed Base in India during the financial year 2023-24.

      Click here to download the self-declaration format
  5. In case of shareholder being tax resident of Singapore, please furnish the letter issued by the competent authority or any other evidence demonstrating the non-applicability of Article 24 - Limitation of Relief under India-Singapore DTAA.

III. General instructions / information

(1) Submission of Tax Exemption Forms / documents for availing the benefit of Tax Treaty Rate, as applicable, by 15th July, 2023

The Tax Exemption Forms from resident shareholders and Forms & Documents from non-resident shareholders for availing the benefit of Tax Treaty Rate, as stated above, may be sent to ISC on or before 15th July, 2023 through the ITC Eform Portal at https://eform.itcportal.com. The Eform Portal is also accessible from the Company's corporate website www.itcportal.com under the section 'Investor Relations'. Alternatively, the Shareholders may send the aforesaid Forms & Documents to ISC through e-mail at isc@itc.in or by post / courier at 37 Jawaharlal Nehru Road, Kolkata 700 071 within the stipulated time period.

The consideration of the aforesaid documents, including application of beneficial Tax Treaty Rate, where applicable, will depend on the adequacy and completeness of such documents submitted by the shareholders and review of the same to the satisfaction of the Company.

Documents received after 15th July, 2023 and / or incomplete documents will not be considered.

(2) The Tax Exemption Forms or the Forms & Documents for availing the benefit of Tax Treaty Rate submitted to the Company earlier for the Interim Dividend 2022-23 paid on 3rd March, 2023 will not be considered relevant for this Final Dividend; Fresh Forms and Documents will be required to be submitted for availing such benefits.

(3) In the event the benefit of lower tax on dividend cannot be provided by the Company due to non-receipt / late receipt of the Tax Exemption Forms or the Forms & 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.

(4) In the event the dividend income as on the Record Date, i.e. 30th May, 2023, is assessable to tax in the hands of a person other than the registered shareholder (viz., the shares are held by a clearing member, broker etc. on behalf of the actual beneficial owner), such registered shareholder (i.e. the said clearing member, broker etc.) is required to furnish to the Company on or before 15th July, 2023, a declaration containing the name, address, residential status and PAN of the actual beneficial owner to whom TDS credit is to be given, and reasons for giving credit to such person. No request in this regard will be considered by the Company after 15th July, 2023.

(5) The TDS Certificate, if applicable, will be e-mailed to your registered e-mail address in due course of time, post payment of the aforesaid dividend.

Should you have any query or require any assistance in the matter, please do get in touch with ISC at the following telephone nos. or e-mail ID:

Telephone nos. : 1800-345-8152 (toll free), 033-2288 6426 / 0034
E-mail : isc@itc.in