General Insurance Corporation of India (GIC) has issued a detailed communication to shareholders regarding the implementation of Tax Deduction at Source (TDS) on dividends for financial year 2025-26.

Dividend Recommendation and Record Date

The Board of Directors at their meeting held on 26th May 2026 recommended payment of dividend of ₹13.25 per equity share (nominal value ₹5 each) for FY ended 31st March 2026, subject to shareholder approval at the ensuing 54th Annual General Meeting. The record date for determining eligibility is Friday, September 4, 2026. Dividend will be paid within 30 days from the AGM date electronically to eligible shareholders.

TDS Implementation Under Income Tax Act 2025

Pursuant to changes in the Income Tax Act, 2025, dividend income will be taxable in the hands of shareholders, and GIC is required to deduct TDS at prescribed rates during dividend payment. The new provisions are effective from 1st April 2026.

TDS Rates and Requirements for Resident Shareholders

  • TDS will be deducted @10% under Section 393(1) Table Sl. No. 7 unless exempt
  • No TDS for individuals if aggregate dividend during TY 2026-27 does not exceed ₹10,000
  • Tax exemption available upon submission of Form 121 with eligibility conditions met
  • PAN linkage with Aadhaar is mandatory - failure results in PAN deemed invalid and TDS @20% under Section 397(2)
  • Specific documentation requirements for various entities:
  • Insurance companies: IRDA registration certificate, self-declaration of beneficial ownership, PAN
  • Mutual Funds: Self-declaration under Section schedule VII, SEBI registration certificate, PAN
  • Alternative Investment Funds: Self-declaration of exemption under Schedule V, SEBI registration, PAN
  • New Pension System Trust: Self-declaration under Schedule VII Table Sl. No. 41, registration documents, PAN
  • Corporation established by Central Act: Self-declaration of exemption, PAN, incorporation certificate
  • IFSC Units: Form NO. 1(N) as per CBDT Notification No. 80/2026 dated 10th July 2026, PAN
  • Lower/NIL TDS available with certificate issued under Section 395(1)

TDS Rates and Requirements for Non-Resident Shareholders

  • Tax withheld @20% plus applicable surcharge and cess under Section 393(2) [Table Sl. No. 17 and 15]
  • Option to avail DTAA benefits if more beneficial requires submission of:
  • PAN card copy
  • Tax Residency Certificate (TRC)
  • E-filed Form 41
  • Self-declaration of no permanent establishment in India
  • Self-declaration of beneficial ownership
  • Lower/NIL TDS available with certificate issued under Section 395(1)/395(2)

Submission Deadline and Process

All documents must be submitted by 5:00 PM on Monday, 7th September 2026 through:

  • Upload on KFintech website: https://ris.kfintech.com/form15
  • Email to: einward.ris@kfintech.com or investors.gic@gicre.in
  • Only postal submissions or from registered email IDs accepted
  • For joint shareholders, first-named shareholder must furnish documents
  • TDS credit transfer to another person requires Declaration under Rule 203 of Income Tax Rules, 2025 by same deadline

Consequences of Non-Submission

In absence of complete documents, GIC will deduct tax as per Income Tax Act provisions:

  • NIL for residents with dividend ≤ ₹10,000 or Form 121 submitted
  • 10% for residents with dividend > ₹10,000 with PAN
  • 20% for residents without PAN or unlinked Aadhaar
  • 20% plus surcharge/cess for non-residents without documents
  • Higher tax rate applied across all holdings for multiple accounts under single PAN

Additional Shareholder Requirements

  • Bank details must be updated with Depository Participants for timely dividend credit
  • Shareholders must update PAN, signature, mobile, email, address, residential status, and category details with DPs
  • TDS credit will be visible in Form 26AS for shareholders with updated PAN
  • Shareholders may file income returns to claim refund if tax deducted at higher rates