Capital Small Finance Bank Limited (the Bank) has issued a communication to its shareholders and stock exchanges regarding the tax deduction at source (TDS) procedures for the proposed dividend for FY 2025-26.

The Board of Directors, at their meeting held on April 29, 2026, recommended a final dividend of ₹5 per equity share. This dividend payout is subject to approval by shareholders at the ensuing Annual General Meeting.

The Bank is required to withhold taxes on the dividend paid to shareholders as per the Income-Tax Act, 2025. The withholding tax rate depends on the residential status of the shareholder and the documents submitted by them.

Key TDS Provisions

  • No TDS for Resident Individuals: If the total dividend paid during Tax Year (TY) 2026-27 does not exceed ₹10,000.
  • TDS for Resident Shareholders (other than above):
  • 10% with valid PAN
  • 20% with no/invalid PAN
  • Rate as per lower/NIL tax deduction certificate obtained from Income Tax Department u/s 395(1)
  • Nil TDS for Certain Resident Entities: Upon submission of specific declarations/documents (Form 121 for individuals, self-declarations for LIC, GIC, Business Trusts, Mutual Funds, Government, RBI, Category I & II AIFs, and other exempt entities).
  • TDS for Non-Resident Shareholders:
  • Foreign Portfolio Investors (FPIs): 20% (plus surcharge and cess) or beneficial tax treaty rate
  • Category III AIF in IFSC: 10% (plus applicable surcharge and cess)
  • Other Non-residents: 20% (plus surcharge and cess) or beneficial tax treaty rate
  • Residents of Notified Jurisdictional Area: 30%
  • Sovereign Wealth Funds and Pension Funds: NIL (upon submission of CBDT notification and self-declaration)
  • Subsidiary of Abu Dhabi Investment Authority (ADIA): NIL (upon self-declaration)

Important Deadlines and Procedures

  • Shareholders must upload all required documents (Form 121, TRC, Form 41, self-declarations, etc.) via the provided link by Monday, June 15, 2026.
  • Documents received after this date will not be considered for determining the TDS rate for the current dividend.
  • The Bank will issue a soft copy of the TDS certificate to shareholders via email post dividend payment.
  • Shareholders are urged to update their KYC details (PAN, email, address, mobile number, bank account) with the Registrar & Transfer Agent (RTA), MUFG Intime India Private Limited, or their Depository Participant.

Additional Notes

  • PAN must be linked with Aadhaar as per Section 262 of the Income-Tax Act; failure will render PAN invalid and attract a 20% TDS rate.
  • The Bank reserves the right to verify PAN details independently and reject documents found incomplete or discrepant.
  • Higher TDS rates may be applied in case of discrepancies, and shareholders must file income returns to claim refunds; no claims lie against the Bank.
  • Shareholders holding shares under multiple accounts with a single PAN will be subject to the highest applicable tax rate across all holdings.
  • All queries should be directed to the RTA at investor.helpdesk@in.mpms.mufg.com.

This communication is for informational purposes, and shareholders are advised to consult their tax advisors for specific guidance.