Khaitan Chemicals Announces Dividend of Rs 0.05 Per Share; Details on TDS Provisions Released
Khaitan Chemicals & Fertilizers Limited has announced a dividend recommendation for its shareholders, setting forth various tax deduction at source (TDS) requirements based on the Income Tax Act, 2025. The Board of Directors recommended a dividend of Rs 0.05 per Equity Share, which represents 5% of the face value of Rs 1/- per share, for the financial year ending March 31, 2026.The dividend payment is contingent upon approval at the ensuing 44th Annual General Meeting (AGM). The company has fixed the record date as Tuesday, July 14, 2026, to determine the entitlement of members for this dividend.
As per the Income Tax Act, 2025, dividends paid or distributed by the company are taxable in the hands of the shareholders. Consequently, Khaitan Chemicals is required to deduct TDS at the time of making the payment, with the applicable rate varying depending on the residential status and documentation provided by the shareholder.
Understanding Tax Deduction Rates
The dividend payout necessitates adherence to specific TDS provisions for different categories of stakeholders. The company provided detailed TDS rates and compliance requirements for resident and non-resident shareholders.Resident Shareholder TDS Breakdown
TDS rates for residents vary based on their category, ranging from 0% (NIL) to 20%. Some zero-TDS categories include Insurance Companies and Corporations established under Central Acts that are exempt from income tax.The following table outlines the TDS structure for resident shareholders:
| Category of Shareholder | Tax Deduction Rate | Key Requirement/Exemption Notes |
|---|---|---|
| Any Resident shareholder | 10% | Requires updated PAN or exemption documentation (e.g., if income does not exceed INR 10,000/-). |
| Residents submitting Form No. 121 | NIL | Subject to prescribed conditions and completion of mandatory fields in the form. |
| Order under Section 395 of the Act | Rate provided in the order | Requires a Lower/NIL withholding tax certificate. |
| Insurance Companies / Exempt Corporations | NIL | Requires documentary evidence supporting exemption status (e.g., covered under Section 393(1) or 393(5)). |
| Other Resident shareholders without PAN or with Invalid/Inoperative PAN | 20% | Mandatory update of valid PAN is required for both demat and physical mode shareholding. |
Non-Resident Shareholder TDS Rates
For non-resident individuals, Foreign Institutional Investors (FII), and Foreign Portfolio Investors (FPI), the tax deduction rate is 20% or the applicable Tax Treaty rate, whichever is lower.| Category of Shareholder | Tax Deduction Rate | Key Requirement/Exemption Notes |
|---|---|---|
| Non-resident shareholders / FII / FPI (without treaty benefit) | 20% / Treaty rate (whichever is lower) | Requires submission of a Tax Residency Certificate and Form No. 41 for the relevant financial year. |
| Submitting Order under Section 395 of the Act | Rate provided in the Order | Requires a Lower/NIL withholding tax certificate from Income Tax authorities. |
| Non-Resident Shareholders (Notified Jurisdictional) | 30% | Applicable if specific conditions are met. |
Documentation and Deadlines
Shareholders are urged to provide necessary documentation, such as Form No. 121 or Tax Residency Certificate, by July 14, 2026, up to 5:00 pm (IST). Documents submitted after the deadline may result in TDS being deducted at a higher rate based on records held by the company and depositories.For demat shareholders, updating PAN and bank account details with their Depository Participant is mandatory. Physical shareholders are requested to submit required forms to Ankit Consultancy Private Limited, the Registrar and Share Transfer Agent (RTA). The company affirmed that TDS will be calculated based on records provided by National Securities Depository Limited or Central Depository Services (India) Limited or the RTA.
KHAICHEM Stock Price Movement
Today, shares of Khaitan Chemicals & Fertilizers Limited edged up to close at ₹55.66, fueled by a gain of 2.58% in the chemical stock. The equity traded during the session within an intraday range bounded by ₹54.02 and ₹56, with 52,884 shares being exchanged.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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