TDS on Income by way of Interest from Infrastructure Debt Fund (Section 194LB)
Where any income by way of interest is payable to a non-resident, not being a company, or to a foreign company, by an infrastructure debt fund referred to in section 10(47), the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of 5%. 19.23a
When TDS is to be deducted:
It will be deducted at the time of payment of such sum in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier.
Rate of TDS for financial years 2017-18 and 2018-19:
The rate of TDS shall be 5% of such gross interest plus surcharge.
Surcharge shall be added if applicable.
Education cess or SHEC shall be added to the above rates plus surcharge if applicable.
The provisions of section 206AA shall not apply to a non-resident, not being a company, or to a foreign company, in respect of payment of such interest subject to such conditions as may be prescribed.
Note.—Tax cannot be deducted at lower rate. Hence, section 197 shall not be applicable in this case.
As per section 115UA(3), if in any previous year, the distributed income or any part thereof, received by a unit holder from the business trust is of the nature as referred to in section 10(23FC)(a) or section 10(23FCA), then, such distributed income or part thereof shall be deemed to be income of such unit holder and shall be charged to tax as income of the previous year.
As per section 10(23FC)(a), distributed income referred to above shall be the income of a business trust by way of interest received or receivable from a special purpose vehicle.
As per section 10(23FCA), distributed income referred to above shall be any income of a business trust, being a real estate investment trust, by way of renting or leasing or letting out any real estate asset owned directly by such business trust.
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