HP Adhesives: Shareholders Advised on Dividend Tax Deductions for FY27

HP Adhesives Limited has issued a communication to its shareholders regarding the tax deduction applicable on dividends for the Financial Year 2026-27. This follows the Board of Directors' meeting on May 12, 2026, where a dividend of 20% or ₹0.40 per equity share of ₹2 each was declared, subject to shareholder approval at the upcoming Annual General Meeting.

As per the Income Tax Act, 1961, dividends paid from April 1, 2020, onwards are taxable in the hands of shareholders, necessitating Tax Deducted at Source (TDS) by the company at applicable rates. The withholding tax rate will vary based on the shareholder's residential status and documentation provided.

For resident shareholders, TDS is generally 10% if PAN is registered, and 20% if not. However, no tax will be deducted for resident individuals receiving dividends up to ₹10,000 in FY 2026-27, or those submitting Form 121. Specific Nil TDS conditions also apply to Insurance Companies, Mutual Funds, Alternative Investment Funds (AIFs), and NPS Trusts upon submission of required declarations and documents.

Non-resident shareholders will be subject to TDS at 20% (plus surcharge and cess) or the lower Tax Treaty Rate, provided they submit necessary documentation including a PAN, Tax Residency Certificate (TRC), Form 10F, and a beneficial ownership declaration. Foreign Institutional Investors (FIIs) / Foreign Portfolio Investors (FPIs) will be taxed at 20% plus applicable surcharge and cess.

Shareholders are urged to submit all required forms and documents to tds@bigshareonline.com by September 14, 2026, 11:59 PM IST, to ensure correct tax deduction. Failure to provide complete and accurate information may result in higher TDS rates, with the option for shareholders to claim refunds by filing their income tax returns. Shareholders are also advised to update their bank account, PAN, and other details with their depository participants for timely dividend credit.