Sheela Foam Limited has communicated detailed guidelines regarding tax deduction at source (TDS) on dividend payments to shareholders pursuant to the Income Tax Act, 2025.

Dividend Recommendation

The Board of Directors at its meeting held on May 14, 2026, recommended a final dividend of Re. 1/- (20%) per equity share of face value ₹5/- per share for the financial year 2025-26. This dividend recommendation is subject to approval by members at the 54th Annual General Meeting scheduled for July 16, 2026. The dividend will be payable to members whose names appear in the Register of Members as of the record date of July 9, 2026.

TDS Framework

Dividends declared and paid by the Company are taxable in the hands of shareholders, and the Company is required to deduct TDS at applicable rates. The tax rates vary depending on the residential status of the shareholder and documents registered with the Company.

Key Deadlines

Shareholders must submit all required tax declaration documents to the Registrar & Share Transfer Agent (RTA), MUFG Intime India Private Limited, by July 3, 2026. Documents received after this date will not be considered for determining applicable withholding tax rates.

Resident Shareholder TDS Rates

  • 10% TDS: For shareholders with valid PAN updated in Company records
  • 20% TDS: For shareholders with no/invalid PAN and no exemption sought
  • Lower/Nil Rate: With lower tax withholding certificate issued by Income Tax Department u/s 395(1)
  • No TDS: For resident individuals if total dividend income during TY 2026-27 does not exceed ₹10,000

Special Categories with Nil TDS

Several categories of resident shareholders may qualify for nil TDS deduction upon submitting required documentation:

  • LIC, GIC, Business Trusts (REIT, InVIT)
  • Government, RBI, Mutual Funds specified under Schedule VII to Section 11
  • Category I and II Alternative Investment Funds (AIFs)
  • Entities exempt under section 393(6) of the Act

Non-Resident Shareholder TDS Rates

  • FPIs/FIIs: 20% (plus surcharge and cess) or tax treaty rate, whichever is beneficial
  • Category III AIF in IFSC: 10% (plus surcharge and cess)
  • Notified Jurisdictional Area residents: 30%
  • Sovereign Wealth funds and Pension funds: NIL (if notified by Central Government)
  • ADIA subsidiary: NIL
  • Lower/Nil Rate: With lower tax withholding certificate u/s 395(1)

Documentation Requirements

Shareholders must provide various documents including PAN card copies, Form 121, Tax Residency Certificates, Form 41 (for non-residents), self-declarations, and registration certificates depending on their category. All documents must be uploaded to the specified link: https://web.in.mpms.mufg.com/formsreg/submission-of-Form-121-41.html

Additional Provisions

  • PAN must be linked with Aadhaar as per Section 262 of Income Tax Act
  • Clearing members must ensure shares are transferred to shareholder accounts by record date
  • Declaration required if dividend income assessable in hands of person other than shareholder
  • Higher tax rate applied for multiple accounts with different residential status under single PAN
  • Company reserves right to reject incomplete documents