Tata Steel Limited - Communication on Tax Deduction at Source on Dividend payout

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<[email protected]> Sat, Jun 1, 2024 at 12:28 AM

TATA STEEL LIMITED

May 31, 2024

THIS COMMUNICATION IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Dear Shareholder,

Trust you and your family are safe and in good health.

We are pleased to inform you that the Board of Directors of the Company, at its meeting held on ­May 29,
2024, has recommended a dividend of Rs.3.60 each per Ordinary Equity Share of face value Re.1/- each
(360%), for the Financial Year ended March 31, 2024.

As you are aware, as per the provisions of the Income Tax Act, 1961 (Act), dividend paid or distributed by a
Company shall be taxable at the hands of shareholders. Therefore, the Company is required to deduct tax at
source (TDS) at the rates applicable on the amount distributed to the shareholders, if approved at the Annual
General Meeting (AGM) of the Company scheduled to be held on Monday, July 15, 2024. The aforesaid
dividend, once approved by the shareholders, will be paid on and from Friday, July 19, 2024.

If there is any change in the information, you are requested to update your records such as tax residential
status, PAN and register your e-mail address, mobile numbers and other details with your relevant
depositories through your depository participants in case you are holding shares in dematerialised form and
if you are holding shares in physical mode, you are requested to furnish details to Link Intime India Private
Limited, the Registrar and Transfer Agent of the Company. The records may please be updated before the
record date to ensure correct deduction of tax, if applicable.
This communication provides a brief on the applicable Tax Deduction at Source (TDS) provisions under the
Act for Resident and Non-Resident shareholder categories.

I. For Resident Shareholders

Tax is required to be deducted at source under Section 194 of the Act, at the rate of 10% on the amount of
dividend where shareholders have registered their valid Permanent Account Number (PAN). In case,
shareholders do not have PAN / invalid PAN/ PAN not linked with Aadhar/ not registered their valid PAN
details in their account or classified as specified person in the income-tax portal, TDS at the rate of 20% shall
be deducted under Section 206AA of the Act or as per the applicable law.

a. Resident Individuals

No tax shall be deducted on the dividend payable to resident individuals if:

i. Total dividend amount to be received by them during the Financial Year (FY) 2024-25 does not
exceed Rs.5,000/-; or
ii. The shareholder provides Form 15G (applicable to individual) / Form 15H (applicable to an
Individual above the age of 60 years), provided that all the required eligibility conditions are met. Please
note that all fields are mandatory to be filled up and Company may at its sole discretion reject the form,
if it does not fulfil the prescribed requirement under the Act. The template of Form 15G and 15H are
enclosed as Annexure 1 and Annexure 2, respectively; or
iii. Exemption certificate is issued by the Income-tax Department, if any.

b. Resident Non-Individuals

No tax shall be deducted on the dividend payable to the following resident non-individuals where they provide
details and documents as per the format attached in Annexure 3.

i. Insurance Companies: Self declaration that it qualifies as ‘Insurer’ as per section 2(7A) of the
Insurance Act, 1938 and has full beneficial interest with respect to the ordinary shares owned by it along
with self-attested copy of PAN card and certificate of registration with Insurance Regulatory and
Development Authority (IRDA).
ii. Mutual Funds: Self-declaration that it is registered with SEBI and is notified under Section 10 (23D)
of the Act along with self-attested copy of PAN card and certificate of registration with SEBI.
iii. Alternative Investment Fund (AIF): Self-declaration that its income is exempt under Section 10
(23FBA) of the Act, and they are registered with SEBI as Category I or Category II AIF along with self-
attested copy of the PAN card and certificate of AIF registration with SEBI.
iv. New Pension System (NPS) Trust: Self-declaration that it qualifies as NPS trust and income is
eligible for exemption under section 10(44) of the Act and being regulated by the provisions of the
Indian Trusts Act, 1882 along with self-attested copy of the PAN card.
 v. Other Non-Individual shareholders: Self-attested copy of documentary evidence supporting the
exemption along with self-attested copy of PAN card.

c. In case, shareholders (both individuals or non-individuals) provide certificate under Section 197 of
the Act, for lower / NIL withholding of taxes, rate specified in the said certificate shall be considered, on
submission of self-attested copy to the company.

II. For Non-resident Shareholders

a. As per Domestic Tax Law

Taxes are required to be withheld in accordance with the provisions of Section 195 or Section 196D of the Act
as per the rates as applicable. As per the relevant provisions of the 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, non-resident
shareholders provide a certificate issued under Section 197/195 of the Act, for lower/ Nil withholding of
taxes, rate specified in the said certificate shall be considered, on submission of self-attested copy of the
same.

b. As per Double Tax Avoidance Agreement (DTAA)

As per Section 90 of the Act, the non-resident shareholder has the option to be governed by the provisions of
the 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 DTAA benefit, the non-resident shareholders are required to submit the
following:

i. Self-attested copy of the PAN card allotted by the Indian Income Tax authorities.
ii. Self-attested copy of Tax Residency Certificate (TRC) for the period April 1, 2024 to March 31, 2025
which is to be obtained from the tax authorities of the country of which the shareholder is a resident.
iii. Filing of digital Form 10F mandatorily online and the same can be generated through the link
https://eportal.incometax.gov.in/.
iv. Self-declaration by shareholder of meeting treaty eligibility requirement and satisfying beneficial
ownership requirement for the period April 1, 2024 to March 31, 2025. (Kindly refer the template
enclosed herewith as Annexure 4.
v. In case of Foreign Institutional Investors and Foreign Portfolio Investors, copy of SEBI registration
certificate.
vi. In case of shareholder being tax resident of Singapore, please furnish the letter issued by the
competent authority or any other evidence demonstrating the non-applicability of Article 24 - Limitation
of Relief under India-Singapore Double Taxation Avoidance Agreement.

It is recommended that shareholders should independently satisfy their eligibility to claim DTAA benefit
including meeting of all conditions laid down by DTAA.
Kindly note that the Company is not obligated to apply beneficial DTAA rates at the time of tax deduction /
withholding on dividend amounts. Application of beneficial rate as per DTAA for the purpose of withholding
taxes shall depend upon completeness and satisfactory review by the Company of the documents submitted
by the non-resident shareholder.

c. Global Depository Receipt (‘GDR’) Holders

In case of GDR holders, taxes shall be withheld at 10% plus applicable surcharge and cess in accordance with
provisions of Section 196C of the Act, only if they provide self-attested copy of the PAN Card. In case, no PAN
details are made available, tax will be deducted at 20% plus applicable surcharge and cess.

Accordingly, to enable us to determine the appropriate withholding tax rate applicable, we request you to
provide these details and documents as mentioned above, on or before Friday, June 21, 2024 (cut-off
period). Any documents submitted after cut-off period will be accepted at sole discretion of the Company.

PAYMENT OF DIVIDEND

The dividend on Ordinary Equity Shares for FY 2023-24, once approved by the shareholders of the Company
at the AGM, will be paid after deducting the tax at source as mentioned in the earlier paragraphs. The
following provisions under the Act will also be considered to determine the applicable TDS rate:

A. TDS to be deducted at higher rate in case of non-filers of Return of Income

The provisions of Section 206AB require the deductor to deduct tax at higher of the following rates from
amount paid/ credited to specified person:

i. At twice the rate specified in the relevant provision of the Act; or

However, as directed by the Central Board of Direct Taxes vide Circular No. 11 of 2021 dated June 21, 2021,
the Company will be using functionality of the Income-tax department for determination of specified person
for the purpose of Section 206AB of the Act.

B. TDS to be deducted at higher rate in case of non-linkage of PAN with Aadhaar

As per Section 139AA of the Income Tax Act, every person who has been allotted a PAN and who is eligible to
obtain Aadhaar, shall be required to link the PAN with Aadhaar. In case of failure to comply to this, the PAN
allotted shall be deemed to be invalid/inoperative and tax shall be deducted at the rate of 20% as per the
provisions of section 206AA of the Act. The Company will be using functionality of the Income-tax
department for the above purpose. Shareholders may visit https://www.incometax.gov.in/iec/foportal/ for
FAQs issued by Government on PAN Aadhar linking.
 C. Declaration under Rule 37BA

In terms of Rule 37BA of the Income Tax Rules 1962, if dividend income on which tax has been deducted at
source is assessable in the hands of a person other than the deductee, then such deductee should file
declaration with Company in the manner prescribed in the Rules.

D. For shareholders having multiple accounts under different status / category:

Shareholders holding Ordinary shares under multiple accounts under different status / category and single
PAN, may note that, higher of the tax as applicable to the status in which shares held under a PAN will be
considered on their entire holding in different accounts.

SUBMISSION OF TAX RELATED DOCUMENTS:

The documents such as Form 15G/ 15H, documents under section 196, 197A, etc. can be uploaded on the
link https://liiplweb.linkintime.co.in/formsreg/submission-of-form-15g-15h.html on or before Friday, June 21,
2024 to enable the Company to determine the appropriate TDS / withholding tax rate applicable. Any
communication on the tax determination/deduction received post Friday, June 21, 2024 shall not be
considered.

Shareholders can send all other documents at the following email id:

Resident Shareholders [email protected]

Documents sent to any other email ids may lead to non-submission of documents and attract TDS as per the
provisions of the Act.

It may be further noted that in case the tax on said dividend is deducted at a higher rate in the absence of
receipt of the aforementioned details/documents from you, there would still be an option available with you
to file the return of income and claim an appropriate refund, if eligible.

The tax credit can also be viewed in Form 26AS by logging in with your credentials (with valid PAN) at
TRACES https://www.tdscpc.gov.in/app/login.xhtml or the e-filing website of the Income Tax department of
India https://www.incometax.gov.in/iec/foportal/.

UPDATION OF BANK ACCOUNT DETAILS:

In order to facilitate receipt of dividend directly in your bank account, shareholders are requested to ensure
that their bank account details in their respective demat accounts/physical folios are updated, to enable the
Company to make timely credit of dividend in their bank accounts. We seek your co-operation in this regard.
Shareholders holding shares in physical folios are requested to note that SEBI vide its Master Circular no.
SEBI/HO/MIRSD/ POD-1/P/CIR/2024/37 dated May 7, 2024 issued to the Registrar & Transfer Agents and
SEBI Circular no. SEBI/HO/MIRSD/POD-1/P/CIR/2023/181 dated November 17, 2023, as amended, has
mandated that effective April 1, 2024, dividend to the security holders holding shares in physical mode shall
be paid only through electronic mode. Such payment to the eligible shareholders holding physical shares
shall be made only after they have furnished their PAN, Choice of Nomination, Contact Details (Postal
Address with PIN and Mobile Number) Bank Account Details and Specimen Signature for their corresponding
physical folios to the Company or the RTA.

Thank you.

With Warm Regards,

Parvatheesam Kanchinadham
Company Secretary & Chief Legal Officer (Corporate & Compliance)
Tata Steel Limited

Encl.:
Annexure 1 – Form No. 15G
Annexure 2 – Form No. 15H
Annexure 3 – Declaration regarding Category and Beneficial Ownership of shares
Annexure 4 – Declaration regarding Tax Residency and Beneficial Ownership of shares

Disclaimer: This communication shall not be treated as an advice from the Company or its affiliates or its
Registrar & Transfer Agent.

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