Section 194LBB of the Income Tax Act, 1961 has been inserted with effect from 1st June 2015 on TDS deduction on Income from Investment Funds.
Time of Deduction: Deduction shall be made by payer, earlier of-
- At the time of credit of income to the account of the recipient or
- At the time of payment in cash or draft or cheque or any other mode
Rate of Deduction: TDS to be deducted at the rate of –
- 10% in case payee is a Resident
- As per rates in force i.e. 30% for Non-Residents.
Exception: Any income of a Venture Capital Company (VCC) or Venture Capital Fund (VCF) from investment in a Venture Capital Undertaking (VCU) shall be exempt from taxation (As per Sec 10(23FB)