Section 194LBB - Income in respect of units of investment fund - Income Tax - Ready Reckoner - Income Tax

Section 194LBB : Tax deduction on Income in respect of units of Investment Fund The provision of section 194LBB inserted with effect from 01.06.2015. Tax deduction is applicable if a business trust distributes any income referred to in section 115UB [not being business income] of the nature referred to in section 10(23FBB) to its unitholders. Time of deduction At the time of credit or payment, whichever is earlier . Rate of TDS In case of Resident - 10% In case of non-resident - 30% (+SC+HEC) Where the payee is Non resident. In case of foreign company - 40% (+SC+HEC) where the payee is foreign company Note:- Tax cannot be deducted at lower rate. Hence section 197 , shall not be applicable in this case. Gross income subject to TDS - Where the payee is a non-resident/foreign company, no deduction shall be made in respect of any income is not chargeable to tax in India.