Gujarat Energy Limited has issued a communication to its shareholders regarding the Tax Deduction at Source (TDS) on dividends for the financial year 2026-27. The announcement clarifies the taxable nature of dividend income and details the process for shareholders to ensure appropriate tax deduction. It outlines the need to update PAN, category, residential status, and email IDs with the company or its Registrar and Transfer Agent (R&TA) by the record date to avoid higher TDS rates.
Shareholder Communication on Dividend TDS
Gujarat Energy Limited has released a crucial communication to its shareholders concerning the Tax Deduction at Source (TDS) applicable to dividends declared and payable for the Financial Year 2026-27. This advisory is in accordance with the provisions of the Income Tax Act, 2025, which mandates that dividend income is taxable in the hands of the shareholders.
Key Requirements for Shareholders
To ensure accurate tax deduction on their dividend income, shareholders are required to provide and update specific details with the company or its Registrar and Transfer Agent (R&TA), KFin Technologies Limited. These essential details include:
- A valid Permanent Account Number (PAN).
- The shareholder’s category (e.g., Domestic Company, Individual, HUF, FPI, etc.).
- Residential status as per the Income Tax Act for Tax Year 2026-27 (Resident or Non-Resident).
- A valid E-mail ID for communication.
- Current Address for Communication.
Shareholders are strongly advised to complete these updates on or before the record date fixed for the dividend payment. Failure to do so may result in the company utilizing the information available in the Depository Participant’s and R&TA’s records, which could lead to the application of higher TDS rates. Notably, resident shareholders who do not have a valid or operative PAN will face a higher TDS deduction rate of 20%.
Update on Concessional Forms and Declarations
The company has also provided details on the submission of concessional forms and declarations for shareholders seeking exemption from TDS. Specific forms, such as Form 121 for resident individuals, and self-attested copies of registration certificates and declarations for insurance companies, mutual funds, alternative investment funds, and other entities, are required. These documents must be submitted via the R&TA’s upload centre or physically to the R&TA by a specified deadline, which is two days post the record date.
Non-Resident Shareholders and Tax Treaties
For non-resident shareholders, the communication explains options to avail tax rates under Double Taxation Avoidance Agreements (DTAA). This requires the submission of documents like a valid PAN (if allotted), a Tax Residency Certificate (TRC), and other declarations as per the prescribed formats. The application of beneficial DTAA rates is subject to the company’s review of the submitted documents.
Important Reminders
Gujarat Energy Limited emphasizes that the TDS rate application is subject to due diligence and verification. In cases of incomplete or conflicting information, the company may deduct TDS at the maximum applicable rate. Shareholders are also reminded that tax credits can be viewed on TRACES and the e-filing website of the Income Tax department. For any queries, shareholders can contact the R&TA directly.
Source: BSE
