Sheela Foam outlines TDS norms for FY26 dividend of Re 1
Sheela Foam Limited has established the tax deduction at source (TDS) guidelines for its recommended final dividend of Re 1 per share for FY26. The policy stipulates a 10% withholding rate for resident shareholders with a valid PAN, rising to 20% for those without, while non-residents are subject to a 20% base rate or applicable treaty benefits. Shareholders must submit required documentation such as Form 121 and Tax Residency Certificates to MUFG Intime India Private Limited by July 3, 2026, to ensure the correct tax rate is applied.
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Sheela Foam Limited has detailed the tax deduction at source (TDS) norms applicable to the final dividend of Re 1 per equity share recommended for the financial year 2025-26. The dividend, subject to shareholder approval at the 54th Annual General Meeting on July 16, 2026, will be paid to members recorded on the register of members as on the record date of July 9, 2026. The company specified that tax rates would vary based on the residential status of the shareholder and the documentation provided.
For resident individual shareholders, no tax will be deducted if the total dividend income during the Tax Year 2026-27 does not exceed ₹10,000. A withholding tax rate of 10% applies to residents with a valid PAN updated in the company's records, while those without a valid PAN or exemption will face a 20% deduction. Shareholders can avail of lower or nil deduction by submitting a valid lower tax withholding certificate or specific declarations such as Form 121.
Resident Shareholder TDS Rates
| Particular | Withholding Tax Rate | Declaration/Documents Required |
|---|---|---|
| Valid PAN updated in Register of Members | 10% | N.A. |
| No/Invalid PAN and no exemption sought | 20% | N.A. |
| Lower/Nil tax deduction certificate u/s 395(1) | Rate specified in certificate | Copy of PAN, Copy of certificate |
Non-resident shareholders are subject to a base rate of 20% plus applicable surcharge and cess, unless a beneficial tax treaty rate applies. Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) must provide a Tax Residency Certificate for the period April 1, 2026, to March 31, 2027, and digital Form 41. Sovereign Wealth Funds and Pension funds notified under Schedule V to Section 11 of the Income Tax Act are eligible for NIL TDS upon submission of relevant notifications and self-declarations.
Shareholders must submit necessary documents, including Form 121, Tax Residency Certificates, and self-declarations, to the Registrar & Share Transfer Agent, MUFG Intime India Private Limited, on or before July 3, 2026. Any communication received after this date will not be considered for determining the appropriate withholding tax rate. The company reserves the right to reject incomplete documents and apply higher rates if PAN is invalid or Aadhaar is not linked as per Section 262 of the Income Tax Act.
Historical Stock Returns for Sheela Foam
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.70% | +0.30% | +12.40% | +35.27% | +12.64% | -34.57% |
How will the variation in TDS rates impact the net dividend yield for retail versus institutional investors?
What is the expected shareholder approval rate for the proposed dividend at the upcoming Annual General Meeting?
Could the strict documentation requirements and higher TDS for non-compliance deter foreign investment in Sheela Foam?
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