Elecon Engineering has announced an interim dividend of ₹0.50 per equity share (50%) for the financial year 2025-26. This dividend will be paid to shareholders holding equity shares as of the record date, October 16, 2025. The company has detailed the tax deduction at source (TDS) implications for both resident and non-resident shareholders, following changes introduced by the Finance Act, 2020.
Interim Dividend Details
The Board of Directors of Elecon Engineering has approved the declaration of an interim dividend of ₹0.50 (i.e., 50%) per equity share, with a face value of ₹1.00 each, for FY 2025-26. The decision was made at a board meeting held on October 10, 2025. The record date for determining eligible shareholders is set for October 16, 2025.
Tax Deduction at Source (TDS)
Following the Finance Act, 2020, dividend income is taxable in the hands of the shareholders. Elecon Engineering will deduct tax at source (TDS) at the time of dividend payment. The TDS rate will depend on the shareholder category and compliance with specific conditions.
TDS for Resident Shareholders
Generally, TDS will be deducted at 10% under Section 194 of the Income Tax Act, unless an exemption applies. No TDS will be deducted for individuals if the total dividend distributed by Elecon Engineering during the financial year does not exceed ₹10,000. Shareholders can submit Form 15G or 15H if eligible for exemption.
A valid Permanent Account Number (PAN) is mandatory. TDS will be deducted at higher rates under Section 206AA if PAN is not provided or is not linked with Aadhaar.
TDS for Non-Resident Shareholders
For non-resident shareholders, tax will be withheld according to Sections 195 and 196D of the Income Tax Act. The standard withholding rate is 20%, plus applicable surcharge and cess, on the dividend amount. Non-resident shareholders can claim benefits under the Double Tax Avoidance Agreement (DTAA) by providing necessary documents, including a Tax Residency Certificate (TRC) and Digital Form 10F.
Important Note on PAN Validity
Invalid PANs, including cases where PAN and Aadhaar are not linked, will result in TDS deductions at higher rates as per Section 206AA of the Act. The rate would be twice the specified rate or 20%.
Submission of Documents
Shareholders are requested to provide all necessary details and documents to Elecon Engineering on or before October 16, 2025, to enable the company to determine the appropriate TDS/withholding tax rate.
Updation of Records
Shareholders holding shares in dematerialized mode should update their records, including tax residential status and PAN, with their respective depository participants. Physical shareholders need to furnish these details to MUFG Intime India Private Limited, the Registrar and Transfer Agent (RTA).
Source: BSE
