HP Adhesives Limited has communicated with its shareholders regarding tax deduction procedures for a proposed dividend. The Board of Directors, at their meeting held on 12th May, 2026, declared a dividend @ 20% i.e., ₹0.40 per Equity Share of ₹2 each for the Financial Year ended 31st March, 2026. This dividend payment is subject to approval by shareholders at the ensuing Annual General Meeting.

Pursuant to amendments in the Income Tax Act, 1961, by the Finance Act 2020, dividend income is taxable in the hands of shareholders, and the Company is required to deduct tax at source (TDS) at the time of payment. The communication elaborates on the applicable TDS provisions for different categories of shareholders and the formalities to be complied with.

Key Details for Resident Shareholders:

  • TDS is required under Section 194 at 10% for shareholders with a valid PAN.
  • TDS is deducted at 20% under Section 206AA for shareholders without a valid PAN.
  • No TDS is deducted for resident individuals if the total dividend for FY 2026-27 does not exceed ₹10,000.
  • Several other entities, including those submitting Form 12I, Insurance Companies, Mutual Funds, Alternative Investment Funds (AIF), and NPS Trust, may be eligible for nil TDS upon submission of specific declarations and documents as detailed in the provided annexures.
  • Shareholders can also submit an order/certificate under Section 197 for a lower or nil withholding tax rate.

Key Details for Non-Resident Shareholders:

  • For Foreign Institutional Investors (FIIs)/Foreign Portfolio Investors (FPIs), TDS is applicable at 20% plus applicable surcharge and cess.
  • Other non-resident shareholders have the option to be governed by Double Tax Avoidance Treaty (DTAA) rates, whichever is lower, upon submission of required documents including PAN, Tax Residency Certificate (TRC), Form 10F, and a declaration of meeting treaty eligibility.
  • The Company is not obligated to apply beneficial Tax Treaty Rates and will do so only upon satisfactory review of submitted documents.

Additional Provisions:

  • Shareholders must provide a declaration under Rule 37BA(2) for credit of TDS.
  • For shareholders with multiple accounts under a single PAN, the higher applicable tax rate will be considered on the entire holding.
  • Section 206AB requires TDS deduction at a higher rate for 'specified persons' who have not filed income returns for the two previous assessment years and had TDS/TCS of ₹50,000 or more in each of those years. Non-residents without a permanent establishment are excluded.
  • Shareholders must submit a declaration in relation to Section 206AB/206CCA (Annexure 10).

Deadlines and Procedures:

  • All required documents (duly completed and signed) must be submitted to the Company's RTA, Bigshare Services Pvt. Ltd., at tds@bigshareonline.com on or before 11:59 pm (IST) on Monday, 14th September, 2026.
  • Incomplete or unsigned forms will not be considered, and no communication on tax determination will be entertained after the deadline.
  • Shareholders are responsible for updating their bank account details, PAN, residential status, and other information with their depository participants.
  • The Company disclaims liability for any tax demands arising from misrepresentation or omission by shareholders and states that shareholders must indemnify the Company in such cases.

The full communication, including all annexures, is available on the Company's website at www.hpadhesives.com.