| 1 |
TDS on Bond & Exemption certificate |
Annexure-A
Information related to the TAX/TDS in respect of interest on U.P. Power Corporation Limited Issued Bonds and TDS thereon under Section 393(1)(5)(i) of the Income-tax Act, 2025 (Erstwhile Section 193 of the Income-tax Act, 1961) with effect from 1st April, 2026 For Financial Year 2026-27
With reference to the investment made by you in Bonds issued by Uttar Pradesh Power Corporation Limited. As you may be aware pursuant to the amendments introduced by the Finance Act, 2023 and subsequent transition to the Income-tax Act, 2025, Tax Deduction at Source (TDS) is applicable on interest payments on listed debentures.
As per Section 393(1)(5)(i) of the Income-tax Act, 2025 (Erstwhile Section 193 of the Income-tax Act, 1961), "The person responsible for paying to a resident any income by way of interest on securities shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax at the rates in force on the amount of the interest payable"
The details of TDS deduction for various investors is, as under:
Resident Investors:-
Investors who have provided valid PAN, tax shall be deducted at source under Section 393(1)(5)(i) of the Income-tax Act, 2025 (Erstwhile Section 193 of the Income-tax Act, 1961) of the Act at 10% on the amount of interest. Tax shall be deducted at source at 20% in the following cases:
- Investors who do not have PAN / have not registered their valid PAN details in their demat account / with the Company / Registrar and Transfer Agent / Depositary Participant.
- A person, whose PAN has become inoperative owing to it not being linked with Aadhaar.
In view of the above, the investors are requested to update their PAN with the RTA / Depository Participants (DP) / Company to avoid higher deduction of TDS.
No tax shall be deducted in the following cases:
The following payees will be eligible for NIL / lower rate of TDS upon providing documents to the Company mentioned hereunder to the satisfaction of the Company:
| Section |
Particular |
Rate of Deduction of Tax at Source |
Documents Required (if any) |
| 393(4)(6)(b) |
Insurance Companies |
Nil |
- Declaration that it is an Insurance company as specified under Proviso to section 393 (Erstwhile Section 193 of the Income-tax Act, 1961).
|
|
|
|
- Self-attested copy of certificate of registration with IRDAI
- Self-attested copy of PAN card
|
| 393(5) |
Government, Reserve Bank of India (RBI), Specified Corporations established by or under Central Act whose income is exempt from tax |
Nil |
- Declaration that it is covered by section 393(5) (Erstwhile Section 196 of the Income-tax Act, 1961) read with the Circulars issued thereunder.
- Self-attested copy of relevant registration documents
- Self-attested copy of PAN card
|
| 393(5) |
Mutual fund as specified at Schedule VII (Table: Sl. No. 20 or 21) |
Nil |
- Documentary evidence to prove that it is a mutual fund specified at Schedule VII (Table: Sl. No. 20 or 21) (Erstwhile clause (23D) of section 10) of the Act and is eligible for exemption.
- Self-attested copy of the registration documents
- Self-attested copy of PAN Card
|
| Section 400 (197A(1F) of IT act 1961) of Income Tax act 2025 |
Category - I & II Alternative Investment Funds (AIF) registered with the Securities and Exchange Board of India (SEBI) |
Nil |
- Self-Attested documentary evidence that the person is covered by Notification No. 51/2015 dated 25.06.2015
and
Declaration that its income is exempt under Schedule V Sl No 1 (Erstwhile section 10(23FBA) of the Income Tax Act 1961) and they are governed by SEBI regulations as Category I or Category II AIF
- Self-attested copy of SEBI AIF registration certificate
- Self-attested copy of PAN card
|
| Schedule VIII of Income tax act 2025 (Erstwhile Sec 10(25) of Income Tax act 1961) and others |
Provident fund to which the Provident Funds Act, 1925 (19 of 1925), recognized provident fund referred to in Sl No 22, approved superannuation funds referred to in Sl No 23, approved gratuity fund referred to in Sl No 24 and funds referred to in Sl No 25 & 26 of schedule VII of Income Tax act 2025 (Erstwhile Sec 10(25) of the act read with CBDT circular 18/2017);
Investors exempted from TDS provisions in terms of any other provisions of the Act or CBDT Circular or notification |
|
- Declaration that entity is covered by CBDT circular or Notification and copy of such circular or notification.
- Grant certificate, Registration certificate, Documentary evidence supporting the exemption status in terms of any provisions of the Act or CBDT Circular or notification.
- Self-attested copy of PAN card
|
|
Resident investor (other than company or a firm) submitting Form 121 (Erstwhile Form 15GH) |
NIL |
Declaration in Form No. 121 (Annexure-1) (Erstwhile Form 15GH) (applicable to any person other than a company or a firm:
In case of individuals below 60 years or any person other than a company or a firm, the declaration shall be accepted only where the total estimated income does not exceed ₹4,00,000 during the financial year.
In case of individuals aged 60 years or above, the declaration shall be accepted where the total estimated income does not exceed ₹12,00,000 during the financial year.
|
|
Resident investors - Lower / NIL tax deduction certificate issued by Income Tax Department u/s 395 of Income Tax Act 2025 |
Rate specified in the Certificate. |
*Lower / Nil tax deduction certificate obtained from Income Tax Authority. Interested investors are requested to obtain lower/nil deduction certificate under our TAN LKNU08003C For FY 2026-27.
|
Non-Resident Investors:
| 1 |
Non-resident investors being Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI)): Tax is required to be withheld in accordance with the provisions of Section 393(2) and section 393(2)(15) & 393(2)(16) of the Act at applicable rates in force. |
20%* (plus applicable surcharge and cess) or tax treaty rate whichever is beneficial. |
To avail beneficial rate of tax as per treaty following documents would be required:
1. In case of FPI/FII, Copy of SEBI registration certificate.
2. Self-attested Tax Residency certificate (TRC) (for FY 2026-27), valid as on record date of interest payment, obtained from the tax authorities of the country of which the debenture holder is resident. In case, the TRC is furnished in a language other than English, the said TRC would have to be translated from such other language to English language and thereafter duly notarized and apostilled copy of the TRC would have to be provided.
3. Self-certified PAN, if any, allotted by the Indian Income Tax Authorities
4. Form 41 (Erstwhile Form 10F) filed electronically on the Indian Income Tax web portal pursuant to Notification No. 03/2022 dated 16th July 2022 and a subsequent notification dated December 12, 2022 issued by the Central Board of Direct Taxes (CBDT), as required under the Income-tax Act, 1961. (Please note that the shareholders may not be eligible for DTAA benefit if the e-filed Form 41 (Erstwhile Form 10F) is not furnished.)
|
| 2 |
Non-Resident investors Lower / NIL tax deduction certificate issued by Income Tax Department 395 of Income Tax Act 2025 |
Rate specified in the Certificate/ Order. |
*Lower / Nil tax deduction certificate obtained from Income Tax Authority. Interested investors are requested to obtain lower/nil deduction certificate under our TAN LKNU08003C.
|
| 3 |
Non-Resident individual investors u/s 393(2) of Income Tax Act 2025 |
20% (plus applicable surcharge and cess) or tax treaty rate whichever is beneficial. |
To avail beneficial rate of tax as per treaty following documents would be required:
1. Self-attested Tax Residency certificate (TRC) (for FY 2026-27), valid as on record date of interest payment, obtained from the tax authorities of the country of which the debenture holder is resident. In case, the TRC is furnished in a language other than English, the said TRC would have to be translated into English and duly notarized and apostilled copy must be provided.
2. Self-certified PAN, if any, allotted by the Indian Income Tax Authorities
3. Form 41 (Erstwhile Form 10F) filed electronically on the Indian Income Tax web portal pursuant to Notification No. 03/2022 dated 16th July 2022 and a subsequent notification dated December 12, 2022 issued by the Central Board of Direct Taxes (CBDT), as required under the Income-tax Act, 1961. (Please note that the shareholders may not be eligible for DTAA benefit if the e-filed Form 41 (Erstwhile Form 10F) is not furnished.)
|
*Lower rate of 5% prescribed under Section 393(2)(3) of the Income Tax Act, 2025 shall be applicable only in respect of interest payable on rupee denominated bonds before 1st July 2023, subject to fulfillment of conditions specified under the said section.
For interest payments on or after 1st July 2023, tax shall be withheld in accordance with Section 393(2), Section 393(2)(15), and Section 393(2)(16) of the Income Tax Act, 2025.
Notes:
- The Company is not obligated to apply beneficial DTAA rates at the time of tax deduction/withholding. Applicability depends on completeness and satisfactory verification of documents submitted by the non-resident investor.
- The investor must provide a Tax Identification Number (TIN) in their country of residence. If not available, a unique identification number must be provided.
- General: To enable TDS exemption, investors are requested to submit tax exemption declarations/documents (Form 121) at least 30 days prior to the scheduled payment date for the respective ISIN. Documents must be sent to:
bondtds@uppcl.org
- Deduction of tax at a lower or NIL rate depends on completeness and satisfactory verification of submitted documents by the Company.
- Tax will be deducted based on valid documents available with the Company.
- If a lower/NIL deduction certificate is obtained under Section 395 of the Income Tax Act, 2025, TDS shall be deducted as per the rates specified in the certificate. Investors are requested to obtain such certificate under TAN LKNU08003C.
- The Company will review submitted documents on a best-effort basis. If tax is deducted at a higher rate due to missing/incomplete documents, investors may claim a refund while filing their income tax return. No claim shall lie against the Company in such cases.
- This communication should not be considered as legal or tax advice. Investors are advised to consult a tax professional for their specific tax matters.
- In case of any tax demand (including interest/penalty) arising due to misrepresentation or incorrect information provided by the investor, the investor shall indemnify the Company and provide necessary support during proceedings.
- The Company will email TDS certificates to registered email IDs. TDS details will also be reflected in Form 168 (previously Form 26AS), which can be accessed via the income tax portal:
https://www.incometax.gov.in/iec/foportal/
- For further clarification, investors may contact:
bondtds@uppcl.org
|