Hindustan Petroleum Corporation Limited (HPCL) has issued an important update regarding tax deduction on dividends for the Financial Year 2025-26. The Board has recommended a final dividend of ₹19.25 per equity share, with a record date of August 14, 2026. The company will now be required to deduct tax at source (TDS) on dividend payments, with specific rates applicable to resident and non-resident shareholders as per the Income Tax Act, 2025.
Dividend and Tax Implications Announced
Hindustan Petroleum Corporation Limited (HPCL) has communicated crucial information to its shareholders regarding the tax implications of the upcoming dividend. Following a Board Meeting on May 13, 2026, a final dividend of ₹19.25 per equity share was recommended for the Financial Year 2025-26. This recommendation is subject to member approval at the upcoming Annual General Meeting (AGM). The designated record date for eligibility to this dividend is August 14, 2026.
Mandatory Tax Deduction at Source (TDS)
In line with amendments to the Income Tax Act, 2025, dividend income is now taxable in the hands of shareholders. Consequently, HPCL is mandated to deduct Tax at Source (TDS) at prescribed rates when disbursing the dividend. Shareholders are advised to ensure their Permanent Account Number (PAN) is updated and linked with Aadhaar to avoid higher tax rates.
Resident Shareholders
For resident shareholders, a TDS rate of 10% is applicable if their PAN is valid and updated in the company’s records. However, if the PAN is not updated, invalid, or if Aadhaar is not linked as required, a higher rate of 20% will apply. For individual resident shareholders, TDS will not be deducted if the total dividend paid does not exceed ₹10,000/- for FY 2026-27. For amounts exceeding this threshold, tax will not be deducted if the shareholder provides a duly signed Form 121 – Annexure 1 (erstwhile Form 15G / Form 15H), provided eligibility conditions are met.
Non-Resident Shareholders
Non-resident shareholders will be subject to a TDS rate of 20% (plus applicable surcharge and cess) under Section 393(2) of the IT Act. Exemptions may be available based on the provisions of the IT Act.
Important Notes for Shareholders
- Shareholders holding shares under multiple accounts with the same PAN will have the higher applicable tax rate applied to their entire holding.
- If tax is deducted at a higher rate due to missing documentation, shareholders may claim a refund when filing their income tax return. No claim for such excess deduction can be made against the Company.
- Shareholders are responsible for any income tax demand arising from misrepresentation or omission of information.
- For those holding shares in dematerialized form, KYC details (PAN, email, mobile, bank details) should be updated with Depository Participants. For physical shares, update with the Registrar & Transfer Agent.
- Shareholders with updated PAN can view TDS credit in Form 16B, downloadable from the e-filing account on incometax.gov.in.
- To avail exemptions or concessions, shareholders must upload necessary documents on www.hpcldiv2026.com or email them to [email protected] on or before July 31, 2026.
Shareholders are encouraged to obtain professional tax advice for their specific circumstances. This communication is for informational purposes and not to be treated as tax advice.
Source: BSE
