Tax on Interim 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 7.5% 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 upto Rs. 5,000 p.a. within a Financial Year.
The Board of Directors of Infosys Limited in their meeting held on October 14, 2020 has declared an interim dividend of Rs.12/- per equity share.
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 mutual funds and insurance company shareholders
- Resident non-individual shareholders (Company, Firms, Trust, HUF, AOP, Bank, etc.)
- Non-resident shareholders (Foreign Institutional Investor)
- Non-resident shareholders (Others)
Further, the Company has released the notification in the newspaper providing information about the record date for the interim dividend and the brief on taxation on the dividend. The same is available here: Link for the paper notification.
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) and register their 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 is enabling a shareholder portal from October 15, 2020. Shareholders are requested to communicate the changes, if any, to the documents already submitted for the Financial Year 2020-21 (during final dividend payout for the FY 2019-20). If no such communication received before the closure of portal (i.e. October 28, 2020), the tax documents earlier submitted will be considered for the purpose of tax deduction at source as per tax law.
Shareholders who have not submitted the forms earlier for the purpose of claiming exemption from tax deduction at source, are requested to upload the relevant tax documents by logging into the shareholder portal on or before October 28, 2020. In this regard, no further communication from the shareholders shall be entertained post the said date (i.e., October 28, 2020). 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 October 28, 2020 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
For information on taxes on previous dividends, please click here: Link for Tax on Final Dividend 2019-20