annual-report-FY2020

MAHINDRA & MAHINDRA LIMITED 6 at source, as may be applicable, after 7 th August, 2020, to those persons or their mandates: (a) whose names appear as Beneficial Owners as at the end of the business hours on Friday, 17 th July, 2020 in the list of Beneficial Owners to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited in respect of the shares held in electronic form; and (b) whose names appear as Members in the Register of Members of the Company as at the end of the business hours on Friday, 17 th July, 2020 after giving effect to: (i) valid request(s) received for transmission/ transposition of shares; and (ii) valid requests of transfer of shares in physical form (re-lodgment cases i.e. requests for transfer(s) which were received prior to 1 st April, 2019 and returned due to deficiency in the documents) lodged with the Company/ its Registrar & Share Transfer Agents on or before Friday, 17 th July, 2020. 13. TDS ON DIVIDEND: Pursuant to the Income-tax Act, 1961, as amended by the Finance Act, 2020, dividend income will be taxable in the hands of Members with effect from 1 st April, 2020 and therefore, the Company shall be required to deduct tax at source (TDS) from dividend paid to Members at the prescribed rates. For the prescribed rates for various categories, Members are requested to refer to the Finance Act, 2020 and amendments thereof. Members are requested to update their Permanent Account Number (“PAN”) with the Company/KFin (in case of shares held in physical mode) and depositories (in case of shares held in demat mode). For Resident Shareholders , tax shall be deducted at source under Section 194 of the Income-tax Act, 1961 @ 7.5% on the amount of Dividend declared and paid by the Company during the Financial Year (”FY“) 2020- 21 provided PAN is provided by the shareholder. If PAN is not submitted, TDS would be deducted @ 20% as per Section 206AA of the Income-tax Act, 1961. However, no TDS shall be deducted on the Dividend payable to a resident Individual if the total dividend to be received during FY 2020-21 does not exceed Rs. 5,000. Please note that this includes the future dividends if any which may be declared by the Board in the FY 2020-21. Separately, in cases where the shareholder provides Form 15G (applicable to any person other than a Company or a Firm) / Form 15H (applicable to an Individual above the age of 60 years), no tax at source shall be deducted provided that the eligibility conditions are being met. Needless to say, PAN is mandatory. Members are requested to note that in case their PAN is not registered, the tax will be deducted at a higher rate of 20%. For Non-resident Shareholders , taxes are required to be withheld in accordance with the provisions of section 195 of the Income-tax Act, 1961 at the applicable rates in force. As per the relevant provisions of section 195 of the said Act, the withholding tax shall be at the rate of 20% (plus applicable surcharge and cess) on the amount of Dividend payable to them. In case of GDRs and Foreign Portfolio Investors / Foreign Institutional Investors, the withholding tax shall be as per the rates specified in Section 196C and 196D of the Act respectively plus applicable surcharge and cess on the amount of Dividend payable to them. However, as per Section 90 read with Section 195 of the Income-tax Act, the non-resident shareholder has the option to be governed by the provisions of the Double Tax Avoidance Agreement (“DTAA“) between India and the country of tax residence of the shareholder, if they are more beneficial to them. For this purpose, i.e. to avail the Tax Treaty benefits, the non-resident shareholder will have to provide the following: • Self-attested true copy of Tax Residency Certificate (“TRC“) obtained from the tax authorities of the country of which the shareholder is resident for the Financial Year 2020-21; • Self declaration in Form 10F; • Self-attested true copy of the PAN Card if allotted by the Indian Income Tax authorities; • Self-declaration in the format prescribed by the Company, certifying the following points: i. Shareholder is and will continue to remain a tax resident of the country of its residence during the Financial Year 2020-21; ii. Shareholder is eligible to claim the beneficial DTAA rate for the purposes of tax withholding on dividend declared by the Company; iii. Shareholder has no reason to believe that its claim for the benefits of the DTAA is impaired in any manner; iv. Shareholder does not have a taxable presence or a Permanent Establishment (“PE“) in India during the Financial Year 2020- 21. In any case, the amounts paid/payable to the Shareholder are not attributable or effectively connected to the PE or fixed base, if any, which may have got constituted otherwise; v. Shareholder is the ultimate beneficial owner of its shareholding in the Company and dividend receivable from the Company; and vi. Non-resident shareholder is satisfying the Principle Purpose Test as per the respective tax treaty effective 1 st April, 2020 (if applicable).