Instructions on tax deductible at source on dividend:

 
In accordance with the provisions of the Income Tax Act, 1961 (‘IT Act’) as amended from time to time, read with the provisions of the Finance Act, 2020, with effect from April 1, 2020, dividends declared and paid by the Company on or after April 1, 2020 are taxable in the hands of the shareholders, and the Company is required to deduct tax at source (TDS) from dividend paid to Members at the applicable rates.
 
To enable the Company to determine the appropriate withholding tax rate, all Shareholders are requested to ensure to update the details (as applicable) through their Depository Participant (if shares are held in Dematerialized Form) or with the Registrar and Transfer Agent or Company in the register of members (if shares are held in Physical Form) in respect of Residential status as per the Act i.e., Resident or Non-Resident, valid Permanent Account Number (PAN), Category of shareholders, Email ID, Address & Contact number. Please note that for the purpose of complying with the applicable TDS provisions, the Company will rely on the above-mentioned details as available on the record date in the Register of Members.
 
The Company is obligated to deduct TDS based on the records made available by National Securities Depository Limited or Central Depository Services (India) Limited (collectively referred to as 'the Depositories') in case of shares held in demat mode and from the RTA in case of shares held in physical mode and no request will be entertained for revision of TDS return.
 
TDS rates that are applicable to shareholders depend upon their residential status and classification as per the provisions of the Act. The Company will therefore deduct tax at source at the time of payment of dividend, at rates based on the category of shareholders and subject to fulfilment of conditions as provided herein below:
 
For Resident Shareholders: -
 
Tax will be deducted at source under Section 194 of the Act at 10% on the amount of dividend payable, unless exempted under any of the provisions of the Act. However, in case of Individuals, TDS would not apply if the aggregate of total dividend paid to them by the Company during the financial year does not exceed Rs. 5,000.
 
Tax will be deducted at source under Section 194 of the Act at 10% on the amount of dividend payable, unless exempted under any of the provisions of the Act. However, in case of Individuals, TDS would not apply if the aggregate of total dividend paid to them by the Company during the financial year does not exceed Rs. 5,000.
 
No tax will be deducted at source in cases where a shareholder provides Form 15G (applicable to individual) / Form 15H (applicable to an individual above the age of 60 years), provided that the eligibility conditions as prescribed under the Act are met. Form 15G and 15H can be downloaded from the link given at the end of this page. Please note that all fields mentioned in the forms are mandatory and the Company will not be able to accept the forms submitted, if not filled correctly.
 
Please also note that valid Permanent Account Number ('PAN') will be mandatorily required. Shareholders are required to link their Aadhaar with their PAN in terms of the provisions of Section 139AA(2) read with Rule 114AAA of the Act within the prescribed timelines. Please also note that where tax is deductible under the provisions of the Act and the PAN of the shareholder is either not available or PAN available in records of the Company is invalid / inoperative, tax shall be deducted @ 20 per cent as per section 206AA of the Act.
Particulars Applicable Rate Documents required (if any)
With PAN 10% -
NIL Form 15G (applicable to any person other than a Company or a Firm) / Form 15H (applicable to an Individual above the age of 60 years).
Without PAN/ Invalid PAN 20% -
Non-linking of PAN with Aadhaar, if allotted 20% As per section 139AA(2) of the Act read with Rule 114AAA of the Income-tax Rules, 1962 ("the Rules”), PAN is mandatorily required to be linked with Aadhaar. If PAN is not linked with Aadhaar, such PAN will be deemed inoperative and tax at source will be required to be deducted at higher rates under section 206AA of the Act.
Provisions of section 206AB of the Act are applicable with effect from 1st July 2021, which states that TDS is to be deducted at higher rate as specified therein on payments to “specified persons”. 20% TDS will be deducted @20% i.e. at twice the applicable rate on the amount of dividend payable to a resident shareholder who has:<.br/> a. not filed return of income for the assessment year relevant to the previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing of return of income under section 139(1) of the Act has expired; and
b. been subjected to tax deduction / collection at source aggregating to Rs. 50,000/- or more in the aforesaid previous year.
Submitting Order under Section 197 of the Income Tax Act, 1961 (Act) Rate provided in the Order Lower/NIL withholding tax certificate obtained from tax authority.
Shareholders (e.g. LIC, GIC) for whom Section 194 of the Act is not applicable) NIL Declaration that it qualifies as insurer u/s 2(7A) of the insurance Act and has full beneficial interest with respect to the shares owned by it along with PAN
Category I and II Alternative Investment Fund NIL A declaration that the AIFs are registered under SEBI as per SEBI Regulations and its income is exempt u/s 10 (23FBA) of the income tax Act.
Persons covered under Section 196 of the Act (e.g. Mutual Funds, Govt.) NIL Certificate of registration u/s 10(23D) issued by the appropriate authority along with PAN, documentary evidence that the person is covered under said Section 196 of the Act.
New Pension System (NPS) Trust. NIL Self declaration that it qualifies as NPS trust and income is eligible for exemption u/s 10(44) of the Act and being regulated by the provisions of the Indian Trust Act 1882 along with self attested copy of the PAN card.
 
For Non-Resident Shareholders (including Foreign Institutional Investors and Foreign Portfolio Investors):-
Particulars Applicable Rate Documents required (if any)
Non-resident shareholders (including Foreign Institutional Investors (FIIs) / Foreign Portfolio Investors (FPIs)) 20% (plus applicable surcharge and education cess) OR Tax Treaty Rate (whichever is lower) a)Self-attested copy of the Permanent Account Number (PAN Card) allotted by the Indian Income Tax authorities.

b)Self-attested copy of Tax Residency Certificate (TRC) obtained from the tax authorities of the country of which the shareholder is resident, valid for FY 2023-24.

c)Self-declaration in Form 10F

d)Self-declaration by the non-resident shareholder of having no Permanent Establishment in India in accordance with the applicable Tax Treaty.

Self-declaration of Beneficial ownership by the non-resident shareholder
Submitting Order under Section 195 / 197 of the Income Tax Act, 1961 (Act) Rate provided in the Order. Lower/NIL withholding tax certificate obtained from tax authority.
Any non-resident shareholder exempted from with holding tax deduction as per the provisions of Income Tax Act or any other law 20% Necessary documentary evidence substantiating exemption from with holding tax deduction.
 
TDS to be deducted at higher rate in case of non-filers of Return of Income:
 
The Finance Act, 2021, has inter alia inserted the provisions of section 206AB of the Act with effect from July 1, 2021. The provisions of section 206AB of the Act require the deductor to deduct tax at higher of the following rates from amount paid/ credited to 'specified person':
  • i. At twice the rate specified in the relevant provision of the Act; or
  • ii. At twice the rates or rates in force; or
  • iii. At the rate of 5%
 
'Specified person' means a person who has:
  • a) not filed return of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing return of income under sub-section (1) of Section 139 has expired; and
  • b) subjected to tax deduction/collection at source in aggregate amounting to Rs. 50,000/- or more in each of such two immediate previous years.
 
Non-resident shareholders who do not have permanent establishment in India are excluded from the scope of a "specified person".
 
In cases where Sections 206AA and 206AB are applicable i.e. the shareholder has not submitted PAN as well as not filed the return, tax will be deducted at higher of the rates prescribed in these sections.
 
The Income Tax Department has made available a functionality for checking compliance under Section 206AB of the Act. Accordingly, for determining TDS rate on Dividend, the Company will be using said functionality to determine the applicability of Section 206AB of the Act. The above-mentioned rates will be subject to applicability of Section 206AB of the Act.
 
In terms of Rule 37BA of the Income Tax Rules, 1962, if dividend income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, then such deductee should file declaration with Company in the manner prescribed in the Rules. No request in this regard will be considered by the Company after September 5, 2024.
 
For all Shareholders: -
 
To enable us to determine the appropriate TDS / withholding tax rate applicable, we request you to provide the above details and documents by email to the Company at secnsm@owmnahar.com not later than September 5, 2024. No communication on the tax determination/ deduction shall be considered after September 5, 2024..
 
In case of joint shareholders, the shareholder named first in the Register of Members is required to furnish the requisite documents for claiming any applicable beneficial tax rate.
 
Shareholders may note that in case the tax on said dividend is deducted at a higher rate in absence of receipt of the aforementioned details/documents from you or due to defect in any of the aforementioned details/documents, option is available to you to file the return of income as per Act and claim an appropriate refund of the excess tax deducted, if eligible. No claim shall lie against the Company for such taxes deducted.
 
Shareholders will be able to see the credit of TDS in Form 26AS, which can be downloaded from their e-filing account at https://incometaxindiaefiling.gov.in.
 
Forms/Declarations
15G
15H
Form 10F
Resident Tax Declaration
Non-Resident Tax Declaration
Declaration under Rule 37BC