Members may note that pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the Shareholders effective April 1, 2020 and the Company is required to deduct tax at source from dividend paid to Members at the prescribed rates. To enable compliance with TDS requirements, Members are requested to complete and/or update their Residential status, PAN and Category with their Depository Participants or in case shares are held in physical form with the Company by sending documents through e-mail.
No tax shall be deducted on the dividend payable to a resident individual shareholder having valid PAN if the total dividend to be received during the Financial Year does not exceed Rs. 5000/-. Shareholders are requested to note that in case their PAN is not registered, the tax will be deducted at a higher rate of 20%. A Resident individual Shareholder with PAN and who is not liable to pay income tax can submit a yearly declaration in Form No. 15G/15H, to avail the benefit of non-deduction of tax at source.
Non-resident Shareholders can avail beneficial rates under tax treaty between India and their country of residence, subject to providing necessary documents i.e. No Permanent Establishment and Beneficial Ownership Declaration, Tax Residency Certificate, Form 10F, any other document which may be required to avail the tax treaty benefits.
Kindly note that the aforesaid documents should be sent by email to the Company at email@example.com in order to enable the Company to determine and deduct appropriate TDS / withholding tax rate. It may be further noted that in case the tax on said dividend is deducted at a higher rate in the absence of receipt of or satisfactory completeness of the aforementioned details/documents from you, the shareholder may claim an appropriate refund in the return of income filed with their respective Tax authorities.
Shareholders will be able to see the credit of TDS in Form 26AS, which can be downloaded from their e-filing account at https://incometaxindiaefiling.gov.in.