Mercury Laboratories Limited issued a comprehensive communication to shareholders regarding tax deduction at source (TDS) procedures for the dividend recommended for the financial year 2025-26.

Dividend Recommendation and Record Date

The Board of Directors at its meeting held on May 29, 2026, recommended a dividend of ₹3.5 per equity share (35%) of face value ₹10 each fully paid-up for FY ended March 31, 2026, subject to shareholder approval at the ensuing Annual General Meeting.

The company fixed Monday, September 21, 2026 as the record date for determining entitlement to receive the dividend, if approved at the AGM.

TDS Framework

Pursuant to amendments introduced by the Finance Act, 2020 effective from April 1, 2020, Dividend Distribution Tax is abolished, and dividend income is now taxable in the hands of shareholders. The company is required to withhold tax at source from dividends paid to shareholders at prescribed rates (plus applicable surcharge and cess).

Resident Shareholders

For Resident Individuals:

  • TDS @10% under Section 393(1) [Table 1 Sl. No. 7] of the Income Tax Act, 2025
  • No TDS if aggregate dividend paid during tax year 2026-2027 does not exceed ₹10,000
  • Option to submit duly signed Form 121 (Annexure-1) to avoid TDS if eligibility conditions met
  • Mandatory PAN requirement with higher rate of 20% if PAN not updated, invalid, deleted, or inoperative due to non-linking with Aadhaar
  • Lower/Nil rate possible with certificate under section 395 of the Act

For Resident Shareholders - Other than Individuals:

Detailed exemption criteria and documentation requirements provided for:

  • Insurance Companies: NIL rate with PAN, registration certificate, and self-declaration (Annexure-2)
  • Mutual Funds: NIL rate if specified under Schedule VII (Table Sl. No. 20 or 21) of the Act
  • Alternative Investment Funds (AIF): NIL rate for Category I or Category II AIFs with PAN, registration certificate, and self-declaration
  • Recognized Provident Funds: NIL rate with valid order from Commissioner
  • Approved Superannuation/Gratuity Funds: NIL rate with valid approval
  • National Pension Scheme: NIL rate with documentary evidence
  • Entities exempt under Schedule VII: NIL rate with declaration
  • Corporations exempt from income-tax: NIL rate with self-declaration
  • Clearing Members/Intermediaries: Rates based on beneficial owners' status with Rule 203 declaration (Annexure-3 with Appendix A)
  • Other resident shareholders without PAN/Invalid PAN/Deleted PAN: 20% rate

Non-Resident Shareholders

Tax deducted at source @20% (plus applicable surcharge and cess) under Section 393 [Table 2 Sl. No. 15 or 17] of the Act, unless exempt under DTAA provisions.

To avail DTAA benefits, non-resident shareholders must provide:

  • Self-attested copy of PAN (if available)
  • Self-attested copy of Tax Residency Certificate (TRC) for tax year 2026-27
  • Completed and duly e-filed Form 41 with acknowledgment number (Annexure-4)
  • Self-declaration of no taxable presence in India and beneficial ownership (Annexure-5)

The company retains discretion to apply beneficial DTAA rates based on completeness of documentation.

Submission Requirements and Deadlines

Shareholders must submit all declarations and documents to secretarial@mercurylabs.com by September 21, 2026. No communications on tax determination/deduction will be entertained after this date.

The company will verify submitted documents and deduct appropriate taxes in accordance with Income Tax Act, 2025 provisions.

Important Notes

  • Shareholders holding shares under multiple accounts with different status categories under a single PAN will be subject to the higher applicable tax rate on their entire holding
  • If tax is deducted at higher rates due to non-submission of documents or inoperative PAN, shareholders may file income tax returns to claim refunds if eligible
  • No claims shall lie against the company for taxes deducted
  • Shareholders are responsible for indemnifying the company against any income tax demands arising from misrepresentation or omission of information

Electronic Dividend Payment

Pursuant to SEBI regulations and MCA General Circular No. 20/2020, dividend will be paid electronically to members' bank accounts. Physical payment modes are no longer permitted.

Shareholder Details Update Process

For physical shares: Submit service requests as per SEBI Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/37 dated May 7, 2024, available on company website or RTA website. Required documents include covering letter, cancelled cheque leaf, and self-attested PAN copy.

For demat shares: Update details with Depository Participants.

Annexures Provided

  • Annexure 1: Form 121 - Declaration under section 393(6) for receipt of certain incomes without deduction of tax
  • Annexure 2: Declaration regarding Category and Beneficial Ownership of shares
  • Annexure 3: Rule 203 declaration along with Appendix A for clearing members/intermediaries
  • Annexure 4: Form 41 - Information to be provided under section 159(8) for non-residents
  • Annexure 5: Declaration regarding Tax Residency and Beneficial Ownership of shares for non-residents

Disclaimer

The information provided does not constitute legal or tax advice. Investors are advised to consult their tax consultants to understand tax implications based on their specific residential status.