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Indofil Industries Limited
Kalpataru Square - 4th floor, Kondivita Road,
Off Andheri Kurla Road, Andheri (East),
Mumbai 400059.
Maharashtra, India.

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Investor Relations

Tax Declaration for Dividend

As per the Income Tax Act, 1961, as amended by the Finance Act, 2020, dividends paid or distributed by a company on or after April 1, 2020 shall be taxable in the hands of the shareholders. The Company shall therefore be required to deduct tax at source at the time of making the payment of the dividend, if approved, at the Annual General Meeting (AGM) of the Company scheduled to be held on September 23, 2020.

This communication provides a brief of the applicable Tax Deduction at Source (TDS) provisions under the Income Tax Act, 1961 for Resident and Non-Resident shareholder categories. The TDS rate may vary depending on the residential status of the shareholder and the documents submitted to the Company in accordance with the provisions of the Act. The TDS for various categories of shareholders for FY 20-21 along with required documents are provided in Table 1 and 2 below:

Table 1: Resident Shareholders

Category of Shareholder Tax Deduction Rate Exemption Applicability/ Documents required
Any resident shareholder with PAN 7.5% Update the PAN if not already done with depositaries (in case of shares held in demat mode) and with the Company's Registrar and Transfer Agents (in case of shares held in physical mode).
  • No deduction of taxes in the following cases - If dividend income to a resident Individual shareholder during FY 2020-21 does not exceed INR 5,000/-,
  • If shareholder is exempted from TDS provisions through any circular or notification and provides an attested copy of the PAN along with the documentary evidence in relation to the same.
Submitting Form 15G/ Form 15H NIL
  • Eligible Shareholder providing Form 15G (applicable to any person other than a Company or a Firm) / Form 15H (applicable to an Individual above the age of 60 years) - on fulfilment of prescribed conditions and eligibility.
  • Format of Form 15G and Form 15H is can be downloaded from below link
    FORM 15G FORM 15H
Order under Section 197 of the Act Rate provided in the order Lower/NIL withholding tax certificate obtained from Income Tax authorities.
Insurance Companies: Public & Other Insurance Companies NIL Self-declaration that it has full beneficial interest with respect to shares owned, along with self-attested copy of PAN card and registration certificate
Corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income- tax on its income. NIL Documentary evidence that the person is covered under section 196 of the Act.
Mutual Funds NIL Documentary evidence that the person is covered under section 196 of the Act.
Alternative Investment fund NIL Documentary evidence that the person is covered by Notification No. 51/2015 dated 25 June 2015.
Other resident shareholder without PAN/Invalid PAN 20% None

Please Note that:

  • Recording of the valid Permanent Account Number (PAN) for the registered Folio/DP id-Client Id is mandatory. In absence of valid PAN, tax will be deducted at a higher rate of 20% as per Section 206AA of the Act.
  • Shareholders holding shares under multiple accounts under different status / category and single PAN, may note that, higher of the tax as applicable to the status in which shares held under a PAN will be considered on their entire holding in different accounts.

Table 2: Non-resident Shareholders

Category of Shareholder Tax Deduction Rate Exemption Applicability/ Documents required
Any non-resident shareholder 20% (plus applicable surcharge and cess) or Tax Treaty rate whichever is lower
  • Non-resident shareholders may opt for tax rate under Double Taxation Avoidance Agreement ("Tax Treaty"). The Tax Treaty rate shall be applied for tax deduction at source on submission of following documents to the company.
  • Copy of the self-attested PAN Card, if any, allotted by the Indian authorities.
  • Self-attested copy of Tax Residency Certificate (TRC) valid as on the AGM date obtained from the tax authorities of the country of which the shareholder is resident
  • Self-declaration in Form 10F. Self-declaration in Form 10F can be downloaded from below link
    FORM 10F
  • Self-declaration confirming not having a Permanent Establishment in India, eligibility to Tax Treaty benefit and do not / will not have place of effective management in India. (Downloaded from the below link – Self declaration).
  • TDS shall be recovered at 20% (plus applicable surcharge and cess) if any of the above-mentioned documents are not provided.
  • The Company is not obligated to apply the Tax Treaty rates at the time of tax deduction/withholding on dividend amounts. Application of Tax Treaty rate shall depend upon the completeness of the documents submitted by the non-resident shareholder and are in accordance with the provisions of the Act.
Foreign Institutional Investors, Foreign Portfolio Investors (FII, FPI) 20% (plus applicable surcharge and cess) None
Submitting Order under section 195(3) /197 of the Act Rate provided in the Order Lower/NIL withholding tax certificate obtained from Income Tax authorities.

Note: The Shareholders holding shares under multiple accounts under different status / category and single PAN, may note that, higher of the tax as applicable to the status in which shares held under a PAN will be considered on their entire holding in different accounts.

Kindly note that the duly completed and signed documents as mentioned in the Table 1 and 2 above are required to be submitted to Registrar at email ID info@masserv.com on or before September 16, 2020 in order to enable the Company to determine and deduct appropriate TDS / withholding tax rate. Incomplete and/or unsigned forms and declarations will not be considered by the Company / Registrar, for the aforesaid purpose. No communication/documents on the tax determination / deduction shall be considered post 11:59 PM (IST) of September 16, 2020.

No claim shall lie against the Company for such taxes deducted.

The Company will arrange to email a soft copy of the TDS certificate at the shareholders registered email ID in due course, post payment of the said Dividend. Shareholders will also 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.

Disclaimer: This communication shall not be treated as an advice from the Company or its Registrar & Transfer Agent. Shareholders should obtain the tax advice related to their tax matters from a tax professional.