LIC Shareholders Alert! Update PAN, Bank Details Or Pay Higher TDS On Dividend--Check Important Dates

Life Insurance Corporation of India (LIC) has asked stakeholders to update PAN, Bank Details  by THIS date, failing which they will have to pay higher TDS on Dividend.

LIC Shareholders Alert! Update PAN, Bank Details Or Pay Higher TDS On Dividend--Check Important Dates

New Delhi: State-owned Life Insurance Corporation of India (LIC) has advised its shareholders to update their bank details and Permanent Account Number (PAN) before July 19 to be eligible for tax deductions on dividend.

"In order to enable us to determine the appropriate tax rate at which tax has to be deducted at source under the respective provisions of the Income-tax Act, 1961, we request Resident members and Non-Resident members to upload the details and documents referred to in this communication in the format provided by us and as applicable to you at No communication on the tax determination / deduction shall be entertained beyond 5.00 (IST) p.m. on Friday, July 19, 2024," LIC has said.

LIC final dividend for Financial Year 2023- 24

LIC's Board of Directors had in its meeting held on May 27, 2024, recommended a final dividend of Rs 6 per equity share of the face value of Rs 10 each (60%) for the Financial Year 2023- 24, subject to declaration of the same by the members of the Corporation at the 3rd Annual General Meeting scheduled to be held on Thursday, August 22, 2024.

The dividend, as recommended by the Board of Directors and if declared at the 3rd Annual General Meeting, will be paid to those members holding equity shares of the Corporation, as on the record date i.e., Friday, July 19, 2024. The final dividend would be paid to the eligible members within a period of 30 days from the date of declaration of dividend, i.e., on or before September 20, 2024, through various online modes or any other permissible modes of payment to those members who have updated their bank account details with their Depository Participants, LIC has said.

"Members holding shares in physical form are requested to take note that SEBI vide circular dated November 3, 2021 (subsequently amended by circulars dated December 14, 2021, March 16, 2023 and November 17, 2023) has mandated that the security holders, holding securities in physical form, whose folio(s) does not have PAN, Choice of Nomination, Contact Details, Mobile Number, Bank Account Details, Specimen Signature updated, shall be eligible for any payment including dividend, interest or redemption in respect of such folios, only upon their furnishing all the aforesaid details in entirety to Registrar and transfer Agent and payment shall be made only through electronic mode with effect from April 01, 2024," the insurance company said.

Tax On Dividend

In terms of the provisions of Income tax Act, 1961 (“Act”), as amended, w.e.f. April 1, 2020, dividend declared and paid by the Corporation is taxable in the hands of its members and accordingly Corporation is required to deduct tax at source (“TDS”) at the time of payment of dividend. The deduction of tax at source will be based on the category of members and subject to fulfilment of conditions as provided herein below:

For Financial Year 2024-25 taxes shall be deducted at source under Section 194 of the IT Act as follows:

TDS rates @ 20% if PAN not invalid or not registered

However, no tax shall be deducted on the dividend payable to a Resident Member (Individual), if the total dividend to be received by them during Financial Year 2024-25 (interim, final or by any other name called) does not exceed ₹5,000. Where the PAN is either not registered or is invalid, tax shall be deducted at source at a rate which is higher of the prescribed TDS rates or @ 20%, said LIC