IRCTC announced the declaration of a Second (2nd) Interim Dividend of ₹3.50 per equity share for FY 2025-26, with a Record Date set for Friday, February 20, 2026. Following amendments to tax laws, TDS will be deducted from this dividend payment. Shareholders, both resident and non-resident, must submit requisite documentation, such as Form 15G/15H or Tax Residency Certificates, to claim potential exemptions or benefit from lower applicable rates.
Dividend Declaration Details
The Board of Directors of Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) met on Thursday, February 12, 2026, and declared the Second (2nd) Interim Dividend at the rate of ₹3.50 per equity share with a face value of ₹2/- each for the Financial Year 2025-26. The payment of this dividend is scheduled within 30 days following the Record Date, Friday, February 20, 2026.
Implications of Taxable Dividends
In compliance with current tax legislation, all dividends paid are taxable in the hands of the shareholders. Consequently, IRCTC is required to deduct Tax Deducted at Source (TDS) at the prescribed rates when making the dividend payment. Shareholders are strongly advised to review the documentation requirements for claiming tax exemption or applying reduced rates.
Section I: Requirements for Resident Shareholders
The applicable TDS rate for resident shareholders varies based on the category and documentation provided:
- Mutual Funds and Insurance Companies: No TDS is required if a self-declaration, along with a valid SEBI or IRDAI registration certificate, is submitted via the designated online portal.
- Category I and II Alternative Investment Funds: Exemption is available upon submission of a specific self-declaration and valid SEBI registration proof, confirming exemption under Section 10(23FBA).
- Other Resident Shareholders:
- TDS is generally applicable at 10% under Section 194, unless aggregate dividend distribution to an individual shareholder during the FY does not exceed ₹10,000/-.
- No TDS will be deducted if a valid Form 15G (for individuals below 60) or Form 15H (for individuals 60 and above) is furnished, confirming no tax liability.
- If a valid PAN is unavailable, TDS will be deducted at 20% under Section 206AA.
Note: If resident PANs have become inoperative due to non-linking with Aadhaar (post June 30, 2023 deadline), TDS will be deducted at 20%.
Section II: Requirements for Non-Resident Shareholders
Non-resident shareholders must submit appropriate documentation to determine the correct TDS rate:
- FPIs and FIIs: TDS is required at 20% (plus surcharge and cess) under Section 196D, or the beneficial rate under the applicable Double Tax Avoidance Agreement (DTAA).
- Other Non-Resident Shareholders:
- TDS is required at the rate of 20% (plus surcharge and cess) under Section 195, unless beneficial DTAA provisions apply.
- To claim DTAA benefits, shareholders must provide a self-attested PAN copy, a valid Tax Residency Certificate for the period April 2025 to March 2026, and self-declarations in Forms 10F and the specific IRCTC format (certifying no Permanent Establishment in India).
Action Required by Shareholders
Shareholders must ensure all required documentation is completed, updated, and uploaded to the portal https://einward.alankit.com/ against their folios on or before Friday, February 20, 2026. Furthermore, shareholders must verify that their bank account details linked to their demat accounts are current to ensure timely dividend credit. The Company will not entertain any communication regarding tax determination or deduction after February 20, 2026.
Shareholders are advised that if tax is deducted at a higher rate due to missing documentation, they retain the option to claim a refund when filing their income tax return. Details of TDS credit will be visible in Form 26AS on the e-filing portal https://incometax.gov.in.
Source: BSE
