Divi’s Laboratories Limited has issued a communication to its shareholders regarding the deduction of Income Tax at source (TDS) on dividend payments for the financial year 2025-26. The company has provided detailed information on the process and documentation required for claiming exemptions or lower TDS rates, emphasizing the importance of timely submission of necessary forms and declarations by the stipulated cut-off date of July 24, 2026.
Shareholder Communication on Dividend Tax
Divi’s Laboratories Limited has shared detailed information with its shareholders concerning the deduction of Income Tax at source (TDS) on dividend payments for the financial year 2025-26. This communication, dated June 10, 2026, outlines the procedures and documentation needed for shareholders to claim exemptions or potentially lower withholding tax rates on their dividend income.
Dividend Details and Record Date
The Board of Directors of Divi’s Laboratories recommended a dividend of ₹30 per fully paid-up Equity Share, representing 1,500%, for the financial year ended March 31, 2026. This dividend is subject to approval at the 36th Annual General Meeting scheduled for August 10, 2026. The dividend distribution is expected to commence on or after August 14, 2026. The record date for determining eligibility for this dividend on equity shares is July 24, 2026.
TDS on Dividends for Resident Shareholders
For resident shareholders, TDS is required under Section 393 of the Income-tax Act at a rate of 10% if a valid Permanent Account Number (PAN) is registered. If the PAN is not available, invalid, or inoperative, TDS will be deducted at 20% under Section 397.
Specific exemptions for resident individuals include:
- No TDS if the total dividend amount does not exceed ₹10,000.
- Submission of Form 121, provided all eligibility conditions are met.
Non-individual resident shareholders (e.g., Insurance Companies, Mutual Funds, AIFs, NPS Trusts) can avail of no TDS by providing specific declarations and documentary evidence as per Annexure 2.
TDS on Dividends for Non-Resident Shareholders
Non-resident shareholders are subject to withholding tax at a rate of 20% (plus applicable surcharge and cess), in accordance with Section 393(2) of the Act. They may opt for beneficial rates under Double Tax Avoidance Agreements (DTAA) by providing a Tax Residency Certificate (TRC), PAN details, E-filed Form 41, and a self-declaration (Annexure 3).
Lower Withholding Tax Certificates
Shareholders, both resident and non-resident, who possess a lower/nil withholding tax certificate under Section 395 of the Act, must submit a self-attested copy of this certificate to the Company. For this purpose, certificates should be submitted referencing the Company’s TAN: HYDD00401C.
Submission of Documents and Cut-off Date
All required documents and declarations, including Form 121 and lower TDS certificates, must be submitted on or before July 24, 2026. Submissions made after this cut-off period will not be considered. Documents can be uploaded via the provided link: https://ris.kfintech.com/clientservices/investors/taxforms.aspx or https://ris.kfintech.com/clientservices/isc/.
In case of difficulties, shareholders can seek assistance via email at [email protected] or [email protected].
Important Considerations
- PAN-Aadhaar Linkage: Failure to link PAN with Aadhaar may result in TDS at the higher rate of 20% as per Section 397.
- Declaration under Rule 203: If dividend income assessable to a person other than the deductee, a declaration must be filed as per Rule 203 (Annexure 4 and 4a).
- Multiple Accounts: For shareholders with multiple accounts under the same PAN, the highest applicable tax rate will be applied to their entire holding.
The company advises shareholders to consult their own tax consultants for specific implications related to their dividend income.
Source: BSE
