Section 194K - Tax deduction at source in respect of income from units - Income Tax - Ready Reckoner - Income Tax

Section 194K - Tax deduction at source in respect of income from units This section has been inserted with effect from 01.04.2020. Applicability Any person responsible for paying to a resident any income in respect of (a) units of a Mutual Fund specified under clause (23D) of section 10; or (b) units from the Administrator of the specified undertaking; or (c) units from the specified company, Time of tax deduction 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. where any income referred to in this section 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. Rate of Tax - @10% Non-Applicability The provisions of this section shall not apply- (i) where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person responsible for making the payment to the account of, or to, the payee does not exceed ₹5,000/-; or (ii) if the income is of the nature of capital gains. Meaning of terms (a) Administrator means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002; (b) specified company means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002; (c) specified undertaking shall have the meaning assigned to it in clause (i) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.