Bajaj Finance Announces TDS Rules Ahead Of Special Dividend — Check Rates, Record Date And More

Bajaj Finance Ltd. on Saturday informed the exchanges about the Tax Deducted at Source requirements for the special dividend to be paid for the financial year ending March 31, 2025.

The special dividend of Rs 12 per share (600% of face value) was declared on April 29, with the record date set for Friday, May 9. The last day to buy shares and be eligible, under India's T+1 settlement cycle, is Thursday, May 8.

This special dividend is being distributed due to the exceptional gain from the sale of Bajaj Housing Finance Ltd. as part of the IPO listing in September 2024. The dividend will be credited on May 26 to eligible shareholders, the filing said.

Under the provisions of the Income Tax Act, TDS will be deducted on dividends paid to both resident and non-resident shareholders. The applicable rate for the same depends on various factors, including the amount of dividend and the shareholder’s category. 

Below are the TDS provisions:

Resident Shareholders:

For resident individual shareholders, TDS will be deducted at 0% on the dividend amount if the aggregate dividend during the financial year 2026 does not exceed Rs 10,000. Additionally, individuals can submit a valid declaration via Form 15G (for individuals under 60 years) or Form 15H (for individuals 60 years or older) to ensure a 0% TDS rate.

If the shareholder’s PAN is not valid or not linked with Aadhaar, TDS will be deducted at a higher rate of 20%, as per section 206AA of the IT Act. The company will verify the PAN status through the Income Tax department’s online system, and no claims will be entertained for higher deductions.

For mutual funds, insurance companies, and similar entities, TDS will be at 0%, provided that valid documents are submitted. Other resident shareholders will have TDS deducted at 10%.

Non-resident shareholders:

TDS will be deducted for non-resident shareholders at a rate of 20% plus the applicable surcharge and health and education cess. For Foreign Institutional Investors and Foreign Portfolio Investors, the TDS will be deducted at 20%, plus applicable surcharge and cess.

Shareholders are required to update their details with KFin Technologies Ltd. or their respective depository participants by May 14, in order to comply with the TDS provisions.

These details include a valid Permanent Account Number, the shareholder’s residential status for fiscal 2026, their shareholder category (such as mutual fund, individual, FPI, etc.), and their address with PIN code. Failure to provide these details may result in higher TDS deductions, the filing said.