SKP Securities Limited has issued a comprehensive communication regarding the deduction of tax at source (TDS) on dividend payments for the financial year 2025-26.

The Board of Directors at its meeting held on May 9, 2026, recommended payment of dividend of Rs. 2 per equity share of face value Rs. 10 each for the financial year ended March 31, 2026. The dividend will be paid to members after declaration at the ensuing Annual General Meeting.

Key Regulatory Framework

The communication is issued in accordance with the provisions of the Income Tax Act, 2025 as amended by the Finance Act, 2026, applicable from April 1, 2026, which makes dividend taxable in the hands of members. The company is required to deduct TDS from dividend payments at prescribed rates.

SEBI Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 3, 2021 (with subsequent amendments) mandates that dividend payments to physical security holders shall be made only through electronic mode effective April 1, 2024. This requires furnishing PAN, choice of nomination, contact details including mobile number, bank account details, and specimen signature.

TDS Provisions for Different Categories

For Resident Members:

  • No TDS if dividend does not exceed Rs. 10,000 during the financial year
  • 10% TDS for amounts exceeding Rs. 10,000 with PAN
  • 20% TDS if PAN is invalid/not available
  • Various exemption categories with specific documentation requirements:
  • Form 12I for individuals 60 years and older
  • Certificate under Section 395 of the Act
  • Mutual Funds under Section 393(5)
  • Insurance Companies exempted under Section 393(4)
  • Alternative Investment Funds (Category I or II)
  • New Pension System Trust
  • Other exempted entities through circulars/notifications

For Non-Resident Members:

  • 20% TDS (plus applicable surcharge and cess) for general cases
  • Foreign Institutional Investors/Foreign Portfolio Investors: 20% (plus applicable surcharge and cess) with SEBI registration certificate
  • Option to be governed by Double Tax Avoidance Agreement (DTAA) rates if more beneficial
  • 30% TDS (plus applicable surcharge and cess) for shareholders from Notified Jurisdictional Area under Section 176
  • Required documents include PAN, Tax Residency Certificate, Form 41, and other jurisdiction-specific requirements

Critical Deadlines and Procedures

All documents must be submitted on or before September 5, 2026, through the specified online portal (https://mdpl.in/login). Only scanned copies of tax relief documents will be accepted, with shareholders required to self-attest stating "certified true copy of the original."

For physical shareholders, documents must be submitted to the Registrar and Transfer Agent, M/s. Maheshwari Datamatics Pvt. Ltd., at 23 R.N. Mukherjee Road, 5th Floor, Kolkata-700001, including duly completed ISR 1, ISR 2, and Choice of nomination forms with banker-attested signature and cancelled cheque leaf.

Important Considerations

  • Members holding shares under multiple accounts with single PAN will be taxed at the highest applicable rate
  • The company reserves the right to reject documents in case of discrepancies or incompleteness
  • For joint shareholders, the first-named shareholder must furnish requisite documents
  • Documents are required once per financial year (April 2026-March 2027) unless status changes
  • Shareholders must submit documents afresh even if similar documents were submitted earlier
  • The company will deduct TDS based on records from depositories (NSDL/CDSL) or RTA, with no revisions entertained
  • Shareholders are responsible for any income tax demands arising from misrepresentation or omission

The communication emphasizes that this is a summary of provisions and shareholders should consult their own tax advisors for specific circumstances.