Section 194LBB – Income in respect of units of the Investment Fund

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)

∼Authored by – CA Anushka Saraogi

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