TDS on Income in respect of Investment in Securitisation Trust (Section 194LBC)

Who is responsible to Deduct TDS under Section 194LBC

(a) Where such income is payable to a resident investor [Section 194LBC(1)]

Where any income is payable to an investor, being a resident, in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA, 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.

(b) Where such income is payable to a Non-Resident Investor [Section 194LBC(2)]

Where any income is payable to an investor, being a non-resident (not being a company) or a foreign company, in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA, 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 rates in force.

When TDS under Section 194LBC is to be deducted ?

Tax shall be deducted at the time of payment or at the time of giving credit to the other party, whichever is earlier.

Rate of TDS under Section 194LBC

Tax is deductible at the rate given below -

1. 25% (where the payee is a resident individual/HUF);
2. 30% (where the payee is a resident but other than individual/HUF;
3. 40% (+SC+HEC) (where the payee is foreign company);
4. 30% (+SC+HEC) (where the payee is non-resident, not being a foreign company).

Lower TDS certificate - Provisions of section 197 are applicable. However, section 197A is not applicable.