Rs 15/Share Dividend: SmallCap Stock To Reward 150% Dividend Soon, But Why You Should Not Have Invalid PAN

NBFC, Pilani Investment And Industries Corporation will be in focus on Monday ahead of its ex-dividend date on August 29 for a whopping 150% dividend payout for the financial year FY23. Investors who are holding the company's shares in their demat accounts by the end of August 29 will be eligible for the dividends reward. However, if you have an invalid PAN, you are liable to pay a higher tax deducted at source (TDS) on the dividends earned.

Pilani Investment is a small-cap stock.

The company has declared an interim dividend of Rs 15 per share having a face value of Rs 10 each for r the Financial Year ending 31st March, 2023. In percentage terms, the dividend payout is 150%.

It needs to be noted that the company will pay the dividend benefits after the approval of the shareholders at the ensuing Annual General Meeting ("AGM"). Pilani is holding its 76th AGM on September 5, where the dividend will be considered for approval by shareholders.

However, the list of eligible shareholders for the dividend will be determined on August 29. Hence, this is also the ex-dividend date for the dividend.

In FY22, the company paid a dividend of Rs 15 per share or 150% having a face value of Rs 10 each aggregating to Rs 16.61 crore to its shareholders.

As per the Trendline data, Pilani has declared at least 11 dividends since August 2012. At the current market price, the company's dividend yield is 0.76%.

On Monday, in the opening bell, Pilani shares traded lower by 0.6% to Rs 1990.50 apiece on BSE. The company's market cap was near Rs 2,204 crore.

Last week, on Friday, the smallcap stock stood at Rs 2002.40 apiece on BSE. In six months, the stock has advanced by nearly 13% on the exchange.

Incorporated in 1942, Pilani Investment Industries is an investment company registered with RBI as an NBFC. The equity shares of the company are listed on BSE and NSE.

Pilani has informed its shareholders that, as amended by the Finance Act, 2020, dividends paid or distributed by a Company on or after 1st April 2020 shall be taxable in the hands of the shareholders. The Company shall therefore be required to deduct tax at source at the time of making the payment of the said Dividend, if declared at the ensuing AGM.

It said, "The TDS rate may vary depending on the residential status of the shareholder and the documents submitted to the Company in accordance with the provisions of the Act. However, in case of individuals, TDS would not apply if the aggregate of total dividend distributed to them by the Company during financial year 2023-24 does not exceeds Rs 5,000."

However, Pilani said that update the PAN if not already done with depositories (in case of shares held in demat mode) and with the Company's Registrar and Transfer Agents - Niche Technologies Private Limited (in case of shares held in physical mode).

This is because, the TDS rate will be 20% on the dividends for resident shareholders without PAN or invalid PAN. With an updated and valid PAN, the TDS rate will be half at 10%.