Home > Income Tax > TDS/TCS > TDS from Income from Units of Business Trust – Sec 194LBA

TDS from Income from Units of Business Trust – Sec 194LBA

U.C Date : 25 Feb 2015

This section is inserted by Finance Act 2014 and is applicable from 1st Oct, 2014.

Tax is to be deductible if a business trust distributes any income referred to in section 115UA being of the nature referred to in section 10(23FC) to its unit holder.

Time of deduction – Tax is deductible at the time of credit of such payment to the account of the payee or at the time of payment in cash or by cheque/dd or any other mode whichever is earlier.

Rate of TDS – If the recipient is resident in India – 10%
If the recipient is a non – resident or a foreign company – 5%
If the recipient doesn’t have PAN or doesn’t furnish PAN to deductor – 20%

Bare Act for Sec 195LBA, 10(23FC) & 115UA

Bare Act for Sec 195LBA, 10(23FC) & 115UA

194LBA.(1) Where any distributed income referred to insection 115UA, being of the nature referred to in clause 23FC  or clause 23FCA of section 10, is payable by a business trust to its unit holder being a resident, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.
(2) Where any distributed income referred to in section 115UA, being of the nature referred to in clause 23FC of section 10, is payable by a business trust to its unit holder, being a non-resident (not being a company) or a foreign company, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five per cent.

(3) Where any distributed income referred to in section 115UA, being of the nature referred to
in clause (23FCA) of section 10, is payable by a business trust to its unit holder, being a
non-resident (not being a company), or a foreign company, the person responsible for making
the payment shall at the time of credit of such payment to the account of the payee or at the time
of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever
is earlier, deduct income-tax thereon at the rates in force.

10(23FC) any income of a business trust by way of interest received or receivable from a special purpose vehicle.
Explanation.— For the purposes of this clause, the expression “special purpose vehicle” means an Indian company in which the business trust holds controlling interest and any specific percentage of shareholding or interest, as may be required by the regulations under which such trust is granted registration;

10(23FCA) 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.
Explanation.—For the purposes of this clause, the expression “real estate asset” shall have
the same meaning as assigned to it in clause (zj) of sub-regulation (1) of regulation 2 of the
Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014
made under the Securities and Exchange Board of India Act, 1992;’;

115UA (1) Notwithstanding anything contained in any other provisions of this Act, any income distributed by a business trust to its unit holders shall be deemed to be of the same nature and in the same proportion in the hands of the unit holder as it had been received by, or accrued to, the business trust.
(2) Subject to the provisions ofsection 111Aandsection 112, the total income of a business trust shall be charged to tax at the maximum marginal rate.
(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 clause ofsection 10, 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.
(4) Any person responsible for making payment of the income distributed on behalf of a business trust to a unit holder shall furnish a statement to the unit holder and the prescribed authority, within such time and in such form and manner as may be prescribed, giving the details of the nature of the income paid during the previous year and such other details as may be prescribed.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get updates and weekly newsletter in your email.

Join more than 20,000 subscribers !