According to Section 194LBB Where any income( Except PGBP referred to in section 10[23FBB],) is payable to a unit holder in respect of units of an investment fund , the person responsible for making the payment shall, at the time of credit of such income to the account of 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, has to deduct TDS.
TDS Rate:
| No | Payee | Rate |
|---|---|---|
| 1 | Resident | 10% |
| 2 | Non-resident or Foreign Company |
rates in force |
Note:
NO TDS in case of non-resident (not being a company) or a foreign company, in respect of any income that is not chargeable to tax under the provisions of the Act.
Explanation.—For the purposes of this section,—
(a) "unit" means beneficial interest of an investor in the investment fund or a scheme of the investment fund and shall include shares or partnership interests
(b) where any income as aforesaid is credited to any account, whether called "suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be the credit of such income to the account of the payee, and the provisions of this section shall apply accordingly.
Meaning of Investment Fund:
"investment fund" means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or a Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992)
Income referred to in section 10[23FBB] :
Explanation.—For the purposes of this section,—
(a) "unit" means beneficial interest of an investor in the investment fund or a scheme of the investment fund and shall include shares or partnership interests
(b) where any income as aforesaid is credited to any account, whether called "suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be the credit of such income to the account of the payee, and the provisions of this section shall apply accordingly.
Meaning of Investment Fund:
"investment fund" means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or a Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992)
Income referred to in section 10[23FBB] :
Any income referred to in section 115UB, accruing or arising to, or received by, a unit holder of an investment fund, being that proportion of income which is of the same nature as income chargeable under the head "Profits and gains of business or profession" (PGBP).
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