Section 196A - TDS on income in respect of units of non-resident - Income Tax - Ready Reckoner - Income Tax

TDS on income in respect of units of non-resident - Section 196A The Scheme of section 196A has been modified with effect from 01.04.2020. Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any income in respect of units of a Mutual Fund specified under clause ( 23D ) of section 10 or from the specified company referred to in the Explanation to clause (35) of section 10 shall, at the time of credit of such income to the account of the payee or at the time of payment thereof by any mode, whichever is earlier Rate of TDS - 20% (+SC+HEC). w.e.f. 01.04.2023, tax will be deducted at the rate of 20% provided in ADT agreement, whichever is lower, if the recipient has furnished tax residency certificate referred to in section 90(4)/90A(4). TDS not to be deducted. Notwithstanding anything contained in section 196A(1) , no deduction of tax shall be made from any income payable in respect of units of the Unit Trust of India to a non-resident Indian or a non-resident Hindu undivided family, where the units have been acquired from the Unit Trust of India out of the funds in a Non-resident (External) Account maintained with any bank in India or by remittance of funds in foreign currency, in accordance, in either case, with the provisions of the Foreign Exchange Management Act, 1999 and the rules made thereunder. [Proviso inserted vide FA, 2023 , Provided that where an agreement referred to in section 90(1) or 90A(1) applies to the payee and if the payee has furnished a certificate referred to in section 90(4) or 90A(4) , as the case may be, then, income-tax thereon shall be deducted at the rate of twenty per cent. or at the rate or rates of income-tax provided in such agreement for such income, whichever is lower. ]