Mangal Compusolution Limited has issued a communication to its shareholders regarding the deduction of tax at source (TDS) on dividend payments for the Financial Year 2025-26. Shareholders are reminded that dividend income is taxable and TDS will be deducted at applicable rates. The company has outlined various documentation requirements for resident and non-resident shareholders to ensure compliance and potentially avail beneficial tax treaty rates. Key dates for submission of documents are also provided.
Dividend Tax Deduction at Source (TDS) Explained
Mangal Compusolution Limited is communicating crucial information to its shareholders concerning the deduction of tax at source (TDS) on upcoming dividend payments. This directive is in accordance with the Income Tax Act, 1961, as amended by the Finance Act, 2020, which mandates TDS on dividends paid or distributed on or after April 1, 2020.
Key Dates for Shareholders
The company has set forth important dates for shareholder action. The Record Date is scheduled for Wednesday, September 16, 2026, and shareholders are required to submit their tax-related documents by the same date. The Annual General Meeting (AGM), where the final dividend will be subject to approval, is on Thursday, September 24, 2026. The Dividend Payout Date is set for on or before October 23, 2026.
TDS Provisions for Resident Shareholders
For Resident Individuals, TDS will be deducted at 10% if a valid Permanent Account Number (PAN) is provided. If the PAN is invalid or not linked with Aadhaar, the TDS rate increases to 20%. However, no tax will be deducted if the total dividend amount received during the Tax Year (TY) 2026-27 does not exceed ₹10,000, or if Form 121 is provided and eligibility conditions are met.
For Resident – Other than Individuals, such as Insurance Companies, Mutual Funds, Alternative Investment Funds (AIF), and New Pension System (NPS) Trusts, specific self-declarations and supporting documents are required to claim exemptions or nil withholding tax. These documents must be submitted as per the formats attached in Annexure 2.
TDS Provisions for Non-Resident Shareholders
Non-Resident Shareholders are subject to withholding tax under domestic law at a rate of 20% plus applicable surcharge and cess. Alternatively, they can opt for beneficial rates under a Double Tax Avoidance Agreement (DTAA). To avail DTAA benefits, non-residents must submit a self-attested copy of their PAN, Tax Residency Certificate (TRC) for the year 2026-27 or calendar year 2026, and a self-declaration in Form 41.
Lower Withholding and Other Provisions
Shareholders can request lower or nil withholding tax by providing a certificate under Section 395 of the Act. For shares held by intermediaries, a declaration as per Annexure 5 is required within 2 days from the Record Date.
General Instructions and Important Notes
Shareholders are urged to ensure their bank account details are updated for electronic credit of dividends. It is crucial to update PAN and residential status with depositories or the Company’s Registrar and Transfer Agent before the Record Date. Incomplete or unsigned forms submitted after Wednesday, September 16, 2026, will not be considered.
The company emphasizes that it is not obligated to apply beneficial tax treaty rates at the time of withholding. Shareholders are advised to obtain independent tax advice from a professional regarding their tax matters.
Source: BSE
