TDS on Dividend

Dear Shareholder(s),

Sub: Communication in respect of deduction of tax at source on Dividend pay out

We wish to inform you that the Board of Directors ('the Board') of your Company at their meeting held on 22^nd May 2025 have recommended a dividend of ₹ 10 (Rupees Ten only) per equity share of the face value of ₹ 2 (Rupees Two only) each (on fully paid-up shares and partly paid-up shares in proportion to their share in the paid-up share capital) for the financial year ended 31^st March 2025.

The dividend, as recommended by the Board, if approved at the ensuing 78^th Annual General Meeting, will be paid to the shareholders holding equity shares of the Company as on the record date/book closure dates. The record date/book closure dates will be announced in due course.

In accordance with the provisions of the Income Tax Act, 1961 ('the Act'), dividend income is taxable in the hands of shareholders and the Company is required to deduct tax at source ('TDS') from dividend payable to the shareholders at the applicable rates.

TDS rates that are applicable to shareholders depend upon their residential status and classification as per the provisions of the Act. The Company will therefore deduct tax at source at the time of payment of dividend, at rates based on the category of shareholders and subject to fulfilment of conditions as provided herein below:

For Resident Shareholders:-

Tax will be deducted at source under Section 194 of the Act @ 10% on the amount of dividend payable, unless exempted under any of the provisions of the Act. However, in case of Individuals, TDS would not apply if the aggregate of total dividend paid to them by the Company during the financial year 2025-26 does not exceed ₹ 10,000.

No tax will be deducted at source in cases where a shareholder provides duly signed Form 15G (applicable to resident individual below 60 years) / Form 15H (applicable to an resident individual above the age of 60 years), provided that the eligibility conditions as prescribed under the Act are met. Form 15G and 15H can be downloaded from the link given at the end of this communication (Formats are as Annexure A and Annexure B respectively) or from the website of the Company viz. https://www.grasim.com/investors/tds-on-dividend. Please note that all fields mentioned in the forms are mandatory and the Company will not be able to accept the form(s) submitted, if not filled correctly.

NIL/lower tax will be deducted on dividend payable to the following categories of resident shareholders, on submission of self-declaration. (Format as Annexure C):

• i Insurance companies: Documentary evidence to prove that the Insurance company qualify as Insurer in terms of the provisions of Section 2(7A) of the Insurance Act, 1938 along with self-attested copy of the registration certificate and PAN card;
• ii Mutual Funds: Documentary evidence to prove that the mutual fund is a mutual fund specified under Section 10(23D) of the Act and is eligible for exemption, along with self-attested copy of the registration certificate and PAN card;
• iii Alternative Investment Fund (AIF) established in India: Documentary evidence to prove that AIF is a fund eligible for exemption under section 10(23FBA) of the Act and as specified in CBDT Notification No. 51/2015 and that they are established as Category I or Category II AIF under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992. Copy of self- attested registration certificate and PAN card should also be provided;
• iv National Pension System Trust & other Shareholders:Declaration along with self-attested copy of documentary evidence supporting the exemption under Section 10(44) of the Act and self-attested copy of PAN card;
• v Shareholders who have provided a valid certificate issued u/s 197 of the Act for lower / nil rate of deduction or an exemption certificate issued by the Income Tax authorities.
• vi Corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income: Declaration along with self-attested copy of documentary evidence supporting the exemption.

Please also note that where tax is deductible under the provisions of the Act and the PAN of the shareholder is either not available or PAN available in records of the Company is invalid / inoperative, tax shall be deducted @ 20% as per section 206AA of the Act.

For Non-Resident Shareholders (including Foreign Institutional Investors and Foreign Portfolio Investors):-

• 1 Tax is required to be withheld in accordance with the provisions of Sections 195 and 196D of the Act @ 20% (plus applicable surcharge and cess) on the amount of dividend payable.
• 2 As per Section 90 of the Act, a non-resident shareholder has an option to be governed by the provisions of the Double Taxation Avoidance Agreement ('DTAA') between India and the country of tax residence of the shareholder, if such DTAA provisions are more beneficial to such shareholder. To avail the DTAA benefits, the non-resident shareholder will have to provide the following documents: -
  • a Self-attested copy of PAN, if any, allotted by the Indian tax authorities. In case of non-availability of PAN, declaration (Format as Annexure D) is to be submitted;
  • b Self-attested copy of valid Tax Residency Certificate ('TRC') for the period 1st April 2025 to 31st March 2026) issued by the tax authorities of the country of which shareholder is tax resident, evidencing and certifying shareholder's tax residency status;
  • c Electronically filed Form 10F valid for the period from 1st April 2025 to 31st March 2026. In pursuance of CBDT Notification no. 03/2022 dated 16th July 2022, w.e.f. 1st April 2023 non-resident shareholder(s) are compulsorily required to furnish Form 10F electronically on income tax portal (www.eportal.incometax.gov.in) with their login credentials, to avail the benefit of DTAA.
  • d Self-declaration (Format as Annexure E) certifying the following points:-
    • i Shareholder is and will continue to remain a tax resident of the country of its residence during FY 2025-26 (1st April 2025 to 31^st March 2026);
    • iiShareholder is the beneficial owner of the shares and is entitled to the dividend receivable from the Company;
      
    • iiiShareholder qualifies as 'person' as per DTAA and is eligible to claim benefits as per DTAA for the purposes of tax withholding on dividend declared/payable by the Company;
    • ivShareholder has no permanent establishment / business connection / place of effective management in India;
      Or
      Dividend income is not attributable/effectively connected to any permanent establishment or fixed base in India; and
    • v Shareholder has no reason to believe that its claim for the benefits of the DTAA is impaired in any manner.
  • e In case of Foreign Institutional Investors and Foreign Portfolio Investors, self-attested copy of the registration certificate issued by the Securities and Exchange Board of India.
  • fIn case of shareholders being tax resident of Singapore, please furnish a 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 (DTAA).
    
    The format of the aforesaid documents may be downloaded from the link given at the end of this communication or Company's website viz. https://www.grasim.com/investors/tds-on-dividend .
    
    Application of beneficial DTAA rate shall depend upon the completeness and satisfactory review by the Company, of the documents submitted by the Non- Resident shareholder and meeting the requirements of the Act, read with the applicable DTAA. In absence of the same, the Company will not be able to apply the beneficial DTAA rates at the time of deducting tax on dividend.
• 3 Where a shareholder furnishes lower / nil withholding tax certificate under Section 197 of the Act, TDS will be deducted as per the rates prescribed in such certificate.

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

As per Section 139AA of the 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 online functionality of the Income-tax department for the above purpose and no claim shall lie against the Company for such higher tax deduction.

To summarise, dividend will be paid after deducting tax at source as under:

Further, 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 (Refer Annexure C). No request in this regard will be considered by the Company after 31^st July 2025.

For all Shareholders:

To enable us to determine the appropriate TDS / withholding tax rate applicable, we request you to provide the above details and documents not later than 31st July 2025.

The aforementioned documents should be uploaded with Company's RTA i.e. KFin Technologies Limited at https://ris.kfintech.com/form15 or mail to einward.ris@kfintech.com. In case the requisite documents are submitted by the shareholders through his/her registered email ID, the Company has full right to demand for the original documents and the shareholders undertake to abide by such request. Documents received by Registered Post or from registered email ID will only be accepted.

In case of joint shareholders, the shareholder named first in the Register of Members is required to furnish the requisite documents for claiming any applicable beneficial tax rate.

No communication on the tax determination/ deduction shall be considered after 31st July 2025.

Shareholders may note that in case the tax on said dividend is deducted at a higher rate in absence of receipt of the aforementioned details/documents from you or due to defect in any of the aforementioned details/documents, option is available to you to file the return of income as per Act and claim an appropriate refund of the excess tax deducted, if eligible. No claim shall lie against the Company for such taxes deducted.

Updation of PAN, Bank Account Details, Signature, Mobile Number, Email Id, Address and other details:

In case shares are holding in electronic form, shareholders are requested to update their PAN, Bank account details, signature, mobile number, e-mail ID, address, residential status, category and other details with their relevant depositories through their depository participants.

In case shares are holding in physical form, shareholders are required to submit Form ISR-1, ISR-2 and ISR-3 or SH-13 along with supporting documents with the Company's RTA viz., KFin Technologies Limited ("KFin") Unit: Grasim Industries Limited, Selenium Building, Tower-B, Plot No. 31 & 32, Financial District Nanakramguda, Serilingampally, Hyderabad, Rangareddy, Telangana, India - 500 032. The Shareholders are requested to go through the web link https://www.grasim.com/investors/investors-forms to download Forms.

The Company is obligated to deduct TDS based on the records made available by National Securities Depository Limited or Central Depository Services (India) Limited (collectively referred to as 'the Depositories') in case of shares held in demat mode and from the RTA in case of shares held in physical mode and no request will be entertained for revision of TDS return.

In the event of any income tax demand (including interest, penalty, etc.) on the Company arising due to any declaration, misrepresentation, inaccurate or omission of any information provided by the shareholder, such shareholder will be responsible to indemnify the Company and, provide the Company with all information / documents and co-operation in any appellate proceedings.

We solicit your cooperation in this regard.

Thanking you,

Yours sincerely,
For Grasim Industries Limited

sd/-
Sailesh Kumar Daga
Company Secretary
FCS-4164

Annexure A - Form 15G
Annexure B - Form 15H
Annexure C - self declaration (Resident shareholder)
Annexure D - self declaration for non-availability of PAN (Non-resident shareholder)
Annexure E - self declaration (Non-resident shareholder)

Disclaimer: The information set out herein above is included for general information purposes only and does not constitute legal or tax advice. Since the tax consequences are dependent on facts and circumstances of each case, the shareholders are advised to consult their own tax consultant with respect to specific tax implications arising out of receipt of dividend.