A Generous Return to Shareholders
Pidilite Industries Limited, a household name behind iconic products like Fevicol, has once again shown its commitment to shareholders. On 8th May 2025, the company’s Board of Directors recommended a dividend of ₹20 per equity share of face value Re. 1/- for the financial year ending 31st March 2025. A significant gesture that will bring joy to thousands of investors, it reflects the company’s solid performance and continued profitability.
But along with the announcement comes an essential reminder: Dividends are now taxable in the hands of shareholders, and tax deduction at source (TDS) rules must be understood and followed carefully.
Why Shareholders Must Act Now
Under the Income Tax Act, 1961, dividends distributed post 1st April 2020 are taxable. Hence, Pidilite is required to deduct TDS before dividend disbursal, and it will only do so after verifying the documents and status submitted by shareholders.
This means your PAN details, tax residency, demat/folio information, and tax declarations play a crucial role in determining how much tax will be deducted from your dividend.
Let’s break down what you need to know, whether you’re a resident or non-resident shareholder.
For Resident Shareholders
TDS Rate and PAN Requirements
Default TDS rate: 10% if PAN is updated and valid.
Higher TDS rate of 20% if:
PAN is not submitted or invalid.
PAN is not linked to Aadhaar.
Classified as “specified person” under IT rules.
Resident Individuals
No tax will be deducted if:
Dividend income for FY 2025–26 is ₹10,000 or less.
You submit a valid Form 15G (below 60 years) or Form 15H (above 60 years).
You hold a valid tax exemption certificate.
Note: The PAN must be correctly registered with your depository or RTA. Otherwise, 20% TDS will apply.
Resident Non-Individuals
Exemptions apply to institutions such as:
Insurance companies
Mutual funds
Alternative Investment Funds (AIF)
NPS Trusts
Others with valid tax exemption certificates
Such entities must submit self-declarations along with PAN and registration proof.
For Non-Resident Shareholders
a. As per Indian Tax Laws
TDS at 20% plus surcharge and cess, unless:
Valid lower/NIL TDS certificate under Section 195/197 is submitted.
b. Claiming Double Taxation Avoidance Agreement (DTAA) Benefit
To claim DTAA benefits (i.e., lower TDS rates), submit:
Self-attested PAN copy
Tax Residency Certificate (TRC) for FY 2025–26
Form 10F (filed online via IT portal)
Self-declaration of beneficial ownership and DTAA eligibility
SEBI registration (for FPIs/FIIs)
For Singapore residents: a specific letter demonstrating exemption under Article 24
Important: DTAA benefits will only be applied after verification. Without documents, higher rates will be deducted.
Deadline: 19th July 2025
All tax-related documents, including Form 15G/15H, declarations, and exemption certificates must be uploaded by 19th July 2025.
Where to Send Documents:
Resident Shareholders:
Upload: Link to MUFG form submission portal
Email:Csgexemptforms2526@in.mpms.mufg.comNon-Resident Shareholders:
Email:investor.relations@pidilite.co.in
Bank Account Details Must Be Updated
Pidilite urges shareholders to update their bank account details in their demat/physical records to ensure smooth dividend transfer. According to SEBI’s latest circular, physical shareholding dividends will only be paid electronically, provided PAN, bank details, signature, and nomination details are furnished.
A Few More Things to Keep in Mind
1. PAN–Aadhaar Link is Mandatory
Under Section 139AA, failure to link PAN with Aadhaar results in 20% TDS deduction.
2. Rule 37BA Declaration
If dividend income is to be assessed in a person’s name other than the deductee, a declaration under Rule 37BA must be filed.
3. Multiple Accounts Under Same PAN
If you hold shares under multiple folios with different statuses (e.g., resident and HUF) under the same PAN, the highest applicable TDS rate will apply to your entire holding.
