General Insurance Corporation of India (GIC Re) has announced a recommended dividend of ₹13.25 per equity share for the financial year ended March 31, 2026. This is subject to shareholder approval at the upcoming 54th Annual General Meeting. The communication also outlines the tax deduction at source (TDS) provisions applicable to dividend income under the Income Tax Act, 2025, providing guidance on documentation for exemptions.
Dividend Announcement for FY2025-26
The Board of Directors at General Insurance Corporation of India (GIC Re) has recommended a dividend of ₹13.25 per equity share for the financial year ended March 31, 2026. This recommendation is based on a nominal value of ₹5/- per share and is pending approval from the shareholders at the 54th Annual General Meeting.
Tax Deduction at Source (TDS) on Dividends
In light of amendments to the Income Tax Act, 2025, dividend income is now taxable in the hands of shareholders. Consequently, GIC Re is required to deduct tax at source (TDS) at the prescribed rates when making dividend payments. Shareholders have been provided with detailed communication regarding TDS provisions, available exemptions, and necessary documentary requirements.
For Resident Shareholders:
- Tax Rate: A rate of 10% will be deducted at source on the dividend amount, unless exempt.
- Exemption Threshold: For individual shareholders, TDS will not apply if the aggregate dividend distributed for the Tax Year (TY) 2026-27 does not exceed ₹10,000.
- Form 121: Tax at source can be avoided if shareholders provide a duly filled Form 121, meeting specific eligibility conditions.
- PAN Requirement: A Permanent Account Number (PAN) is mandatory for all shareholders. Failure to link PAN with Aadhaar may result in a 20% TDS rate.
Exemptions from Withholding Tax:
Certain organizations may be exempt from TDS by providing specific documentation:
- Insurance Companies: Require documentary evidence of non-applicability of Section 393(4), a self-attested IRDA registration certificate, and a self-declaration.
- Mutual Funds: Need a self-declaration regarding their governing provisions and SEBI registration certificate.
- Alternative Investment Fund (AIF): Must provide a self-declaration of income exemption and SEBI registration.
- New Pension System Trust: Requires a self-declaration and copy of registration documents.
- Corporations established by a Central Act: Need a self-declaration of exemption, attested PAN card, and certificate of incorporation.
For Non-Resident Shareholders:
Tax will be withheld at applicable rates, generally 20% plus surcharge and cess. Non-residents may opt for Double Tax Avoidance Agreement (DTAA) benefits by providing:
- Self-attested PAN Card.
- Tax Residency Certificate (TRC).
- E-filed Form 41.
- Self-declaration of no permanent establishment in India.
- Self-declaration of beneficial ownership.
Important Dates and Submission Details
To determine the correct TDS/withholding tax rate, shareholders must submit the required details and documents by 5:00 PM on Monday, September 7, 2026. Documents can be uploaded on the KFin Technologies Limited website at ris.kfintech.com/form15 or emailed to [email protected]. Shareholders can also email [email protected].
The dividend will be paid after deducting applicable TDS. The record date for dividend eligibility is Friday, September 4, 2026.
The Corporation is not obligated to apply beneficial DTAA rates at the time of initial tax deduction.
Source: BSE
