Motherson sets July 14 deadline for dividend tax declarations
Samvardhana Motherson International has announced a deadline of July 14, 2026, for shareholders to submit necessary declarations to determine TDS rates on the final dividend of Re. 0.25 per share for FY 2025-26. The company specified TDS rates ranging from nil to 20% for residents and varying rates for non-residents based on documentation and tax treaties. Documents must be submitted to KFin Technologies Limited by the stipulated deadline to avoid higher deductions.
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Samvardhana Motherson International has established a deadline of July 14, 2026, for shareholders to submit declarations and documents necessary to determine the Tax Deducted at Source (TDS) rate on the final dividend for the financial year ended March 31, 2026. The company's Board recommended a final dividend of Re. 0.25 per equity share on May 20, 2026, which will be paid following the Annual General Meeting (AGM) scheduled for July 30, 2026. Under the provisions of the Income-tax Act, 2025, dividend income is taxable in the hands of shareholders, and the company is required to deduct TDS at applicable rates.
TDS Rates for Resident Shareholders
The applicable TDS rate for resident shareholders varies based on the validity of their Permanent Account Number (PAN) and specific declarations submitted. Shareholders with a valid PAN are subject to a 10% TDS rate, though no deduction applies if the aggregate dividend distribution does not exceed ₹10,000. A higher rate of 20% applies to shareholders with no PAN, an invalid PAN, or an inoperative PAN that is not linked with Aadhaar as per Section 262(6) of the IT Act.
Resident individuals may submit Form 121 to claim a nil rate of TDS. This form replaces the erstwhile Forms 15G and 15H under the new tax regime. Specific entities such as Mutual Funds specified under Schedule VII of the IT Act, insurance companies, and Alternative Investment Funds (Category I and II) are eligible for a nil TDS rate upon submission of self-declarations and valid registration certificates.
| Category | Applicable Rate | Key Requirement |
|---|---|---|
| Valid PAN | 10% | Standard rate; nil if dividend ≤ ₹10,000 |
| No / Invalid PAN | 20% | Update PAN with depositories or RTA |
| Inoperative PAN | 20% | PAN must be linked with Aadhaar |
| Form 121 Submission | Nil | Valid PAN + Form 121 declaration |
Guidelines for Non-Resident Shareholders
Non-resident shareholders, including Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs), are subject to a base TDS rate of 20% plus applicable surcharge and cess, unless a lower Tax Treaty rate applies. To benefit from tax treaty rates, non-residents must provide a Tax Residency Certificate (TRC) valid for FY 2026-27, a copy of their PAN, and a self-declaration confirming their eligibility and beneficial ownership status.
Specific categories of non-resident investors have defined rates. Category III Alternative Investment Funds located in International Financial Services Centre and Category I FPIs are subject to a 10% rate plus surcharge and cess. Sovereign Wealth Funds and Pension funds notified under Schedule V of the IT Act, as well as subsidiaries of the Abu Dhabi Investment Authority, qualify for a nil TDS rate provided they submit evidence of the applicable notification and a self-declaration.
| Category | Applicable Rate | Documents Required |
|---|---|---|
| General Non-Resident | 20% or Treaty Rate | TRC, PAN, Form 10F, Self-declaration |
| AIF Category III (IFSC) | 10% (+ surcharge/cess) | PAN, Self-declaration, Registration certificate |
| FPI Category I | 10% (+ surcharge/cess) | PAN, Self-declaration, Registration certificate |
| Sovereign/Pension Funds | Nil | PAN, CBDT notification, Self-declaration |
Submission and Compliance Details
Shareholders must upload all applicable documents as a single PDF file on the portal of KFin Technologies Limited, the company's Registrar and Transfer Agent, by 1700 Hours IST on July 14, 2026. Physical documents may also be sent to the RTA's office in Hyderabad, provided they arrive before the deadline. Any communication received after this date will not be considered, and tax will be deducted at the maximum applicable rate in cases of incomplete or missing information.
The company emphasized that recording a valid PAN in its records is mandatory. In the absence of a valid PAN, tax will be deducted at a higher rate of 20% plus surcharge and cess. Shareholders are advised that if tax is deducted at a higher rate due to insufficient documentation, they may file a return of income to claim a refund. The company will subsequently issue a TDS certificate, and shareholders can view the tax credit in Form 168 on the income tax portal.
Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE775A01035/1155b650e0894ee0.pdf
Historical Stock Returns for Samvardhana Motherson International
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.89% | -0.63% | +10.05% | +19.70% | +34.80% | +58.84% |
How will the introduction of Form 121 under the new tax regime impact administrative compliance costs for the company and its resident shareholders?
What potential cash flow implications might arise for non-resident investors if treaty benefits are not successfully claimed by the July 14 deadline?
Could the strict documentation requirements and higher penalties for non-compliance influence foreign investor sentiment toward Samvardhana Motherson International?
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