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Deduction of Tax on Dividend Payments
HCL Technologies Limited - Communication of deduction of Tax at Source on Dividend
In accordance with the provisions of the Income Tax Act, 1961 (‘the Act’) as amended by and read with the provisions of the Finance Act, 2020, as amended from time to time applicable with effect from April 1, 2020, dividend declared and paid by the Company is taxable in the hands of its shareholders, and accordingly the Company is required to deduct tax at source (TDS) at the applicable rates.
However, no TDS shall be deducted on the Dividend payable to a resident Individual if the total dividend to be received by them during a Financial Year does not exceed Rs. 5,000.
In view of the above, the Company shall be deducting TDS as per applicable provisions and TDS rates, while paying dividends in a Financial Year.
Tax shall be deducted at source @10% for those resident shareholders with valid Permanent Account Number (PAN), 20% for resident shareholders without PAN or invalid PAN. Hence, the shareholders are advised to update their PAN with the Depository Participant, if shares are held in Demat form, and with the Registrar and Share Transfer Agent of the Company, if shares held in Physical form.
Tax shall be deducted at source @20% (plus applicable surcharge and cess) on dividend paid to Foreign Institutional Investors (“FIIs”) and Foreign Portfolio Investors (“FPIs”) in view of specific provision under section 196D of Act. In case of non-resident shareholders other than FII/ FPI, tax shall be deducted at source on dividend paid @20% (plus applicable surcharge and cess) in accordance with the provisions of section 195 of the Act.
Further, the shareholders have an option to apply to the Company for non-deduction of TDS or deduction of TDS at a lower rate by providing the necessary documents to the Company as prescribed in Annexure-A to this letter. The Non-Resident shareholders (Including FII/FPI) who wish to take benefit of the rates as prescribed under the Double Tax Avoidance Agreement (‘DTAA’) shall also be required to submit the necessary documents as prescribed in Annexure-A.
The above referred documents, duly completed and signed (in xerox or original, as described in below table ) should be sent to the Registrar & Transfer Agent (“RTA”) of the Company, M/s. Link Intime India Private as directed in Annexure-A.
· In case where only xerox documents are required to send, the same should be sent to email@example.com through registered e-mail of the shareholder address by quoting your Name, Folio number / Demat Account No., Number of shares and PAN details on or before 5:00 P.M. (IST) of the Record Date fixed for the respective dividend in order to enable the Company to determine and deduct appropriate TDS / withholding tax.
· In case where the originally signed documents are required to be submitted, the same should be submitted to our RTA at its Mumbai/ New Delhi Address (Mr. Amit Kumar Banerjee - Associate Vice President, M/s. Link Intime India Private Limited, Unit- HCL Technologies Limited, C-101, 247 Park, L B S Marg, Vikhroli (West), Mumbai- 400083 or to Link Intime India Pvt. Ltd, Noble Heights, 1st floor, Plot No NH-2, C-1 Block, LSC, near Savitri Market, Janakpuri, New Delhi- 110058 within the above prescribed time limit. No communication on the tax determination/ deduction shall be entertained in respect of the dividend declared after the above time limit.
All communications/ queries in this respect should be addressed and sent to our RTA, Link Intime India Private Limited at its email address mentioned above.
Shareholders may note that in case the tax on said dividend is deducted at a higher rate in absence of receipt, or insufficiency of the aforementioned details/documents from you, an option is available to you to file the return of income as per Income Tax Act, 1961 and claim an appropriate refund, if eligible.
To view / download Form 10 F click here.
To view / download Form 15 G & 15 H click here.
To view / download Form No PE and Beneficial Ownership Declaration click here.
In order to know the amount tax deducted, the Company shall be sending the TDS certificate in respect of tax deducted to its shareholders after payment of dividend in due course. Alternatively, the shareholders can also check Form 26AS from their e-filing accounts at https://incometaxindiaefiling.gov.in.
List of Documents to be submitted for non-deduction of Tax at Source of applying concessional Rates of TDS
|S. No.||Category||Documents required under the Income Tax Act, 1961 for applying concessional Rates of TDS/ Nil TDS||Mode of submission|
Certificate under section 197 of the Act
Form 15G/ 15H (in respect of sections 197A(1) & 197A(1C) of the Act respectively.
One xerox copy
Two copies in original
|2||Non-Resident Individuals /Foreign Nationals/ Foreign Banks/ Foreign Body Corporates, Erstwhile OCBs / FPI/FII||
Certificate under section 195 or 197 of the Act
Tax Residency Certificate issued by the Revenue/ Tax Authorities of the country of which the shareholder is Resident, for the year in which dividend is to be received & Form 10F as per the Act, and Self-Declaration – No PE and beneficial Owner
One xerox copy
One copy each of all documents in color scanned or in original
|3||HUFs/ Trust/ Trusts/Associations/ Resident Bodies Corporates/ Commercial Banks/ Indian Financial Institutions/ Clearing Members||Certificate under section 197 of the Act||One xerox copy|
|4||Foreign bodies corporate||Certificate under section 195 or 197 of the Act||One xerox copy|
|5||Mutual Funds||Certificate that Mutual Fund is specified under section 10(23D) of the Act.||One xerox copy|