Hikal Ltd. has issued a communication to its shareholders regarding the applicability of tax deduction at source (TDS) on dividends declared for the financial year 2026-27. The company outlines the process, required documents, and timelines for shareholders to ensure correct tax deductions. This includes specific guidelines for resident and non-resident individuals and entities, as well as the implications of not linking PAN with Aadhaar.
Hikal Ltd. Informs Shareholders on Dividend TDS
Hikal Ltd. has provided detailed information to its shareholders concerning the tax deduction at source (TDS) applicable to dividend income. This communication, dated August 27, 2026, clarifies the procedures and requirements following the provisions of the Income Tax Act, 2025.
Dividend Declaration and Taxability
The Board of Directors recommended a final dividend of Rs. 0.40/- per equity share for the financial year ended March 31, 2026. This dividend is subject to shareholder approval at the 38th Annual General Meeting scheduled for September 23, 2026. As per the Income Tax Act, this dividend income is taxable in the hands of shareholders, necessitating TDS by the company at the time of payment.
Record Date and Key Dates
The company has fixed Friday, September 04, 2026, as the record date for determining shareholder eligibility for the dividend payment. Shareholders are urged to ensure their bank account details are updated in their demat or physical folios for timely credit of the dividend.
TDS Guidelines for Resident Shareholders
For resident shareholders, tax is to be deducted at 10% if a valid Permanent Account Number (PAN) is registered. In cases of non-availability or invalid PAN, or PAN not linked with Aadhaar, TDS will be deducted at 20%.
Resident Individuals:
No tax will be deducted if the total dividend amount does not exceed Rs. 10,000/- during the Tax Year (TY) 2026-27. Alternatively, an exemption can be claimed if Form 121 is provided and eligibility conditions are met. Shareholders can also provide an exemption certificate from the Income-tax Department.
Resident Non-Individuals:
Specific documentation and self-declarations are required for entities like Insurance Companies, Mutual Funds, Alternative Investment Funds (AIFs), and New Pension System (NPS) Trusts to be exempt from TDS, provided they meet certain criteria and provide supporting documents like PAN cards and registration certificates.
Shareholders can also provide a certificate under Section 395(1) of the Act for lower or NIL withholding tax, which will be considered by the company.
TDS for Non-Resident Shareholders
Under domestic tax law, non-resident shareholders will be subject to withholding tax at the rate of 20% (plus applicable surcharge and cess). For non-residents seeking to avail benefits under Double Taxation Avoidance Agreements (DTAA), specific documents such as a Tax Residency Certificate (TRC), PAN card, and self-declarations are required. The company reserves the right to apply beneficial DTAA rates only after satisfactory review of submitted documents.
Submission of Documents and Deadlines
Shareholders are requested to submit all required documents and declarations by Thursday, September 10, 2026, to the email ID [email protected]. Documents submitted after this date will not be considered. Failure to provide documents may result in TDS being deducted at a higher rate.
Important Notes for Shareholders
- The company emphasizes the importance of updating KYC data, including PAN, email, address, and mobile number, with the Registrar and Transfer Agent (RTA) or Depository Participant.
- In case of discrepancies in submitted information, the company reserves the right to rely on its independent assessment for tax deduction.
- For shareholders holding shares under multiple accounts with a single PAN, the highest applicable tax rate will be applied to their entire holding.
- In case TDS is deducted at a higher rate, shareholders can claim a refund by filing their income tax return.
- Shareholders are advised to consult their tax advisors for specific guidance.
Source: BSE
