Tax on Final Dividend 2020-21
The Finance Act 2020 has replaced the Dividend Distribution Tax (DDT) with the classical system of dividend taxation, hence dividend income is now taxed in the hands of the shareholders. In the light of the above changes, under the Income-tax Act, 1961 (Act), companies paying dividend are required to withhold tax at the applicable tax rates (for Resident shareholder at 10% with valid Permanent Account Number (PAN) or at 20% without/invalid PAN and for Non-Resident shareholders the rates prescribed under the Act or Tax Treaty, read with Multilateral Instruments, if applicable). No withholding of tax is applicable if the dividend payable to resident individual shareholders (having valid PAN) is up to Rs. 5,000 p.a. within a Financial Year.
The Board of Directors of Infosys Limited (the Company) in their meeting held on April 14, 2021 have recommended a final dividend of Rs.15/- per equity share for the financial year ended March 31, 2021 subject to shareholders’ approval at the ensuing Annual General Meeting to be held on June 19, 2021.
As it is important for the Company to receive the relevant information from shareholders to determine the rate of tax deduction, the Company has sent out communications to shareholders as per the classification given below (please click below hyperlink for details):
- Resident individual shareholders with valid PAN
- Resident individual shareholders without PAN or invalid PAN
- Resident individual shareholders with dividend payable below threshold limit
- Resident mutual funds and insurance company shareholders
- Resident non-individual shareholders (Company, Firms, Trust, HUF, AOP, Bank, etc.)
- Non-resident shareholders
Company has released the notification in the newspaper providing information about the record date for dividend and the brief on taxation on the dividend. The same is available here. If you are a shareholder of the Company as on the record date, and the dividend receivable by you is taxable under the Income Tax Act, 1961, the company shall be obligated to deduct taxes at source on the dividend payable to you as per the applicable provisions under the Income Tax Act, 1961.
Shareholders holding shares in dematerialized mode, are requested to update their records such as tax residential status, permanent account number (PAN), registered email addresses, mobile numbers and other details with their relevant depositories through their depository participants and shareholders holding shares in physical mode are requested to furnish details to the Company’s registrar and share transfer agent KFin Technologies Private Limited (formerly Karvy Fintech Private Limited).
The company has enabled a shareholder portal for shareholders to upload the relevant tax documents for purposes of tax deduction at source. We request shareholders to upload the relevant documents till June 7, 2021. No documents will be considered after June 7, 2021. We request shareholders to kindly take note of it accordingly.
The shareholders are requested to go through the list of documents to be provided by each types of shareholders provided at shareholder portal https://www.infosys.com/investors/shareholder-services/dividend-tax.html
All the documents submitted by you on or before June 7, 2021 will be verified by us and we will consider the same while deducting the appropriate taxes if they are in accordance with the provisions of the Income Tax Act, 1961.
The shareholder portal is available here: Link for the shareholder portal.
Instructions and guidelines for the shareholder portal are available here. Link for instructions and guidelines.
Shareholder can reach us for clarification at email@example.com or on WhatsApp + 91 6366953150. Details of QR code and instructions to access WhatsApp.