HP Adhesives declares ₹0.40 per share dividend for FY26
- HP Adhesives declares a 20% dividend of ₹0.40 per equity share for FY26
- Payout subject to shareholder approval at the upcoming Annual General Meeting
- Resident shareholders with valid PAN face 10% TDS; non-residents face 20%
- Deadline for TDS document submission is September 14, 2026, at 11:59 pm
- New Form 121 replaces Forms 15G and 15H for income below taxable limits
*this image is generated using AI for illustrative purposes only.
HP Adhesives declared a 20% dividend, equivalent to ₹0.40 per equity share of face value ₹2 each, for the financial year ended March 31, 2026. The Board of Directors approved the payout during its meeting on May 12, 2026, subject to shareholder approval at the upcoming Annual General Meeting.
Dividend Payment and Tax Deduction
The company will deduct tax at source (TDS) on the dividend payment in accordance with the Income Tax Act, 1961, as amended by the Finance Act 2020. Dividend income is taxable in the hands of shareholders, with withholding rates varying based on residential status and document verification.
Resident Shareholders
For resident individuals with a valid Permanent Account Number (PAN), the applicable TDS rate is 10% under Section 194. If PAN details are missing or invalid, the rate rises to 20% under Section 206AA. No tax is deducted for residents receiving dividends up to ₹10,000 in FY26-27 or those submitting Form 121 declaring income below the taxable limit.
Exemptions also apply to specific entities including insurance companies, mutual funds, Alternative Investment Funds (AIFs), and New Pension System (NPS) trusts, provided they submit the required self-declarations and registration certificates.
Non-Resident Shareholders
Non-resident shareholders face a standard withholding rate of 20%, plus applicable surcharge and cess. Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) are subject to this rate without exception. Other non-residents may claim benefits under Double Tax Avoidance Agreements (DTAA) if they submit complete documentation, including a Tax Residency Certificate and Form 10F.
Compliance Requirements
Shareholders must submit necessary declarations and documents to the Registrar and Transfer Agent, Bigshare Services Private Limited, at tds@bigshareonline.com . The deadline for submission is 11:59 pm on September 14, 2026. Incomplete or unsigned forms will not be considered, and no further communications will be accepted after this date.
| Shareholder Category | Applicable TDS Rate | Key Requirement |
|---|---|---|
| Resident with valid PAN | 10% | Valid PAN registered |
| Resident without PAN | 20% | Section 206AA applies |
| FIIs / FPIs | 20% + surcharge/cess | None |
| Non-Residents (DTAA) | Treaty Rate or 20% | TRC, Form 10F, Annexure 8 |
Shareholders holding multiple accounts under different statuses but with a single PAN will be taxed at the higher rate applicable to any of their holdings. Additionally, non-filers of income tax returns for the two preceding years may face enhanced TDS rates under Section 206AB, potentially doubling the standard rate or applying a flat 5% charge.
What the Numbers Show
The declaration of a 20% dividend on a ₹2 face value share indicates a consistent return policy for HP Adhesives. The strict adherence to TDS compliance deadlines highlights the regulatory burden on retail investors, particularly regarding the new Form 121 declarations replacing older exemption forms.
Historical Stock Returns for HP Adhesives
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +3.55% | +7.09% | +13.03% | +15.54% | -20.17% | 0.0% |
How might HP Adhesives' 20% dividend payout ratio impact its future capital expenditure plans and growth trajectory in the adhesives sector?
What are the potential implications for retail investor sentiment if the strict September 2026 TDS compliance deadline leads to widespread withholding errors or delays?
Could the enhanced TDS rates under Section 206AB for non-filers significantly reduce the net dividend yield for a substantial portion of HP Adhesives' shareholder base?
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