TDS under section- 194LA, 194LB, 194LBA, 194LBB, 194LBC

This article discusses in detail about the provisions of Section 194LA- Payment of compensation on acquisition of certain immovable property, 194LB- Income by way of interest from infrastructure debt fund, 194LBA- Certain income from units of a business trust, 194LBB- Income in respect of units of investment fund, 194LBC- Income in respect of investment in securitization trust.

TDS section

Section 194LA- TDS on Payment of Compensation on the acquisition of certain immovable property.

Scope of Section 194LA

Section 194LA applies to the amount of payment made in the nature of compensation or consideration or enhanced compensation /consideration by any person to a resident on account of compulsory acquisition of any immovable property (other than agriculture land).

Rate of TDS 

Tax at the rate of 10% shall be deducted under section 194LA on such amount paid.

When to deduct TDS u/s 194LA

Tax under section 194LA shall be deducted at the time of making payment of such sum.

Exception

TDS u/s 194LA is not required to be deducted under the following scenarios:

  • Where the amount of such payment or aggregate amount of such payments made to a resident during the Financial Year does not exceed Rs.2,50,000/-.
  • where such payment is made under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013).

Section 194LB- TDS on Income by way of interest from an infrastructure debt fund.

Scope of Section 194LB

Section 194LB applies to the amount paid in the nature of interest on infrastructure debt fund to a non-resident (other than a company or foreign company).

Rate of TDS 

The person responsible for making payment is required to deduct tax at the rate of 5% on such an interest amount.

When to deduct TDS u/s 194LB

Tax under section 194LB shall be deducted at the time of making payment of such interest income.

Section 194LBA- TDS on Certain income from units of a business trust.

Scope of Section 194LBA

Section 194LBA applies on the amount paid as Income under section 115UA by a Business trust to its unitholder.

Rate of Tax

Income Rate of Tax
Income paid to Resident unit holder u/s 115UA, being of a nature referred to in section 10 (23FC)(a) or section 10 (23FCA) 10%
Income paid to a non-resident (not being a company) or a foreign company unit holder u/s 115UA, being of nature referred to in section 10 (23FC)(a)  5%
Income paid to a non-resident (not being a company) or a foreign company unit holder u/s 115UA, being of nature referred to in section 10 (23FCA) 30% (the rate in force)

When to deduct TDS u/s 194LBA

Tax under section 194LBA shall be deducted at the time of making payment of such income.

Section 194LBB- TDS on Income in respect of units of an investment fund.

Scope of Section 194LBB

Section 194LBB applies to the amount paid as income in respect of an Investment Fund specified under section 115UB to a unitholder.

Rate of Tax

The Person responsible for making payment shall deduct a tax at the rate as specified below:

  • In a case where the payee is a resident – Tax shall be deducted at the rate of 10%.
  • In the case where the payee is a non-resident (not being a company) or a foreign company – Tax shall be deducted at the rate in force 

When to deduct TDS u/s 194LBB

Tax u/s 194LBB shall be deducted at the earlier of, the credit of such income to the account of the payee or at the time of making payment either in cash or by way of issuing cheque or draft or by any other mode.

Section 194LBC- TDS on Income in respect of investment in securitization trust.

Scope of Section 194LBC

Section 194LBC applies to the amount paid as an income to an investor in respect of an investment in a securitization trust as specified u/s 115TCA.

TDS Return

Rate of Tax

The Person responsible for making payment shall deduct a tax at the rate as specified below:

  • In the case where the payee is a resident Individual or HUF – Tax shall be deducted at the rate of 25%.
  • In the case where the payee is any other resident person- Tax shall be deducted at the rate of 30%
  • In the case where a payee is a Non-resident person- Tax shall be deducted at the rate in force.

When to deduct TDS u/s 194LBC

Tax u/s 194LBC shall be deducted at the earlier of, the credit of such income to the account of the payee or at the time of making payment either in cash or by way of issuing cheque or draft or by any other mode.

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