Pidilite Details Dividend Tax Rules, Declares Deadline for Forms, Record Date for Shareholder Eligibility

Pidilite Industries Limited (BSE: 500331, NSE: PIDILITIND) has issued a detailed communication to its shareholders regarding the tax deduction at source (TDS) applicable to the dividend of Rs. 20.00 per equity share. This dividend was recommended by the company's Board of Directors on May 8, 2025, for the financial year ended March 31, 2025. The company has emphasized the importance of timely submission of requisite documents by July 19, 2025, for shareholders wishing to claim exemptions or lower TDS rates.

Pidilite Industries - Dividend and Tax Document Submission Details (FY 2024-25)Particulars

Details

Company

Pidilite Industries LimitedDividend per equity share

Rs. 20.00 (Face Value Re. 1/- each)Financial Year

2024-25 (ended March 31, 2025)Dividend Recommendation Date

May 8, 2025Record Date for Dividend

To be announced (Dividend payment subject to AGM approval)Deadline for Tax Document Submission

July 19, 2025

Detailed Analysis of Tax ImplicationsThe communication, dated June 17-18, 2025, outlines the tax implications following the changes introduced by the Finance Act, 2020, which abolished the Dividend Distribution Tax (DDT) effective April 1, 2020. Consequently, dividend income is now taxable in the hands of the shareholders, and companies are required to deduct tax at source before distributing dividends.Background: The Shift in Dividend TaxationPrior to April 1, 2020, companies paid DDT on dividends declared, and such dividends were generally tax-exempt in the hands of shareholders. The Finance Act, 2020, reverted to the classical system of dividend taxation, where companies are not liable for DDT, but shareholders must pay tax on the dividend income received, based on their respective income tax slab rates. Pidilite Industries will deduct TDS at the time of making the dividend payment, subject to its approval at the upcoming Annual General Meeting (AGM).TDS for Resident ShareholdersFor resident shareholders, the TDS provisions are governed primarily by Section 194 of the Income Tax Act, 1961.

• General TDS Rates: Tax will be deducted at 10% if the shareholder has registered a valid Permanent Account Number (PAN). If a shareholder does not have a PAN, or has an inoperative/invalid PAN, or if the PAN is not linked with Aadhaar, or if the PAN details are not registered in their account, or if they are classified as a "specified person" under tax laws, TDS will be deducted at a higher rate of 20% as per Section 206AA of the Act.
• Claiming Exemptions: Individuals:
  • No TDS will be deducted for resident individuals if the total dividend amount to be received by them during the Financial Year 2025-26 does not exceed Rs. 10,000.
  • Alternatively, no TDS will be deducted if the shareholder provides a valid Form 15G (for individuals) or Form 15H (for individuals aged 60 years or above), provided all eligibility conditions are met. Templates for these forms were provided as Annexure 1 and Annexure 2 in the company's communication.
• Claiming Exemptions: Non-Individual Entities: Certain resident non-individual entities can claim exemption from TDS by submitting self-declarations and specified documents (as detailed in Annexure 3 of the communication). These include:
  • Insurance Companies qualifying under Section 2(7A) of the Insurance Act, 1938.
  • Mutual Funds registered with SEBI and notified under Section 10(23D) of the Income Tax Act.
  • Alternative Investment Funds (AIFs - Category I or II) whose income is exempt under Section 10(23FBA).
  • New Pension System (NPS) Trust whose income is eligible for exemption under Section 10(44).
  • Other non-individual shareholders providing documentary evidence supporting their exemption claim, along with a self-attested PAN card.
• Lower Tax Deduction (Section 197 Certificate): If a shareholder provides a certificate for lower or nil deduction of tax issued by the Income Tax Department under Section 197 of the Act, TDS will be applied at the rate specified in such certificate.

TDS for Non-Resident ShareholdersFor non-resident shareholders, TDS will be applied as per the provisions of Section 195 or Section 196D of the Income Tax Act, or as per the applicable Double Tax Avoidance Agreement (DTAA).

• Under Domestic Tax Law: The withholding tax rate under domestic law is 20% (plus applicable surcharge and cess) on the dividend amount. A lower or nil rate may apply if a certificate under Section 197/195 is furnished.
• Availing Double Tax Avoidance Agreement (DTAA) Benefits: Non-resident shareholders can opt for the beneficial provisions of a DTAA between India and their country of tax residence. To avail DTAA benefits, they must submit:
• Self-attested copy of their PAN card.
• Self-attested copy of the Tax Residency Certificate (TRC) for the relevant period (e.g., April 1, 2025, to March 31, 2026, or January 1, 2025, to December 31, 2025), obtained from the tax authorities of their residence country (format in Annexure 4).
• Form 10F, filed online via the Indian Income Tax portal (`https://eportal.incometax.gov.in/`) (format in Annexure 5).
• A self-declaration confirming they meet treaty eligibility requirements and satisfy beneficial ownership conditions for the relevant period (format in Annexure 6).
• Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) must also provide a copy of their SEBI registration certificate.
• Shareholders resident in Singapore need to furnish evidence demonstrating the non-applicability of Article 24 (Limitation of Relief) of the India-Singapore DTAA.

Critical Compliance: PAN-Aadhaar Linking and PAN ValidityThe company highlighted that under Section 139AA of the Income Tax Act, linking PAN with Aadhaar is mandatory for eligible persons. Failure to comply can render the PAN invalid or inoperative, leading to TDS at 20% as per Section 206AA. Shareholders are advised to ensure their PAN is valid and linked with Aadhaar. The company will use the Income Tax Department's functionality to verify PAN status. FAQs on PAN-Aadhaar linking are available on the government's income tax portal.Process for Document SubmissionTo ensure correct TDS, shareholders must submit the necessary documents by the stipulated deadline.

• Online Portal and Email IDs:
  • Resident shareholders can upload documents like Form 15G/15H via the link: `https://web.in.mpms.mufg.com/formsreg/submission-of-form-15g-15h.html`.
  • Other documents for resident shareholders can be emailed to: `Csgexemptforms2526@in.mpms.mufg.com`.
  • Non-resident shareholders should send their documents to: `investor.relations@pidilite.co.in`.
• Deadline and Consequences of Late Submission: All documents must reach the company or its Registrar and Transfer Agent (RTA), M/s. MUFG Intime India Private Limited, on or before July 19, 2025. Any communication or documents received after this date will not be considered for determining the applicable TDS rate for the current dividend payment. If tax is deducted at a higher rate due to non-submission or late submission of documents, shareholders can claim a refund, if eligible, by filing their income tax return.

Importance of Updated Shareholder RecordsPidilite has urged shareholders to ensure their records are up-to-date.

• Bank Account Details for Dividend Credit: Shareholders should verify and update their bank account details in their respective demat accounts (for shares held in dematerialized form) or with the RTA (for shares held in physical form) to facilitate timely credit of dividends.
• Requirements for Physical Shareholders: As per SEBI mandates effective April 1, 2024, dividends to physical shareholders will be paid only through electronic mode. Such shareholders must furnish their PAN, choice of nomination (optional), contact details (postal address with PIN, mobile number), bank account details, and specimen signature to the company or RTA.
• Shareholders holding shares under multiple accounts with different statuses but a single PAN should note that the higher of the applicable tax rates will be considered for their entire holding.

Accessing Tax Credit InformationPost-dividend payment and TDS, shareholders can view the tax credit in their Form 26AS. This can be accessed by logging into their accounts on the TRACES portal (`https://www.tdscpc.gov.in/app/login.xhtml`) or the Income Tax Department's e-filing website (`https://www.incometax.gov.in/iec/foportal/`).Company's Stance and Shareholder Advisory

Pidilite Industries has stated that this communication is intended to guide shareholders and is not exhaustive. Shareholders are advised to consult their own tax advisors for personalized advice regarding the tax implications of the dividend and the necessary actions to be taken. The company also clarified that it will not be liable for taxes deducted based on the information available or submitted. The detailed communication has also been uploaded to the company's website under the 'Investors/Shareholders Corner' section (`https://www.pidilite.com/investors/shareholders-corner/`).