Insertion of new section 194LBA
56. After section 194LB of the Income-tax Act, the following section shall be inserted with effect from the 1st day of the October, 2014, namely:––
Certain income from units of a business trust
“194LBA. (1) 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 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 nonresident, 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.”.
Notes on Clauses:
Clause 56 of the Bill seeks to insert a new section 194LBA in the Income-tax Act which relates to certain income from business trust.
The said new section proposes to provide for deduction of tax at the rate of five per cent. in case of non-resident unit holders and at the rate of ten per cent. in case of resident unit holders of business trust on that portion of distributed income of the trust which is taxable in the hands of unit holder.
This amendment will take effect from 1st October, 2014.
