Amendment of section 194LBB.
81. In section 194LBB of the Income-tax Act, for the words “deduct income-tax thereon at the rate of ten per cent.”, the following shall be substituted with effect from the 1st day of June, 2016, namely:-
“deduct income-tax thereon,-
(i) at the rate of ten per cent., where the payee is a resident;
(ii) at the rates in force, where the payee is a non-resident (not being a company) or a foreign company.”.
Notes on Clauses:
Clause 81 of the Bill seeks to amend section 194LBB of the Income-tax Act relating to income in respect of units of investment fund.
The aforesaid section provides that where any income other than that proportion of income which is of the same nature as income referred to in clause (23FBB) of section 10, is payable to a unit holder in respect of units of an investment fund specified in clause (a) of the Explanation 1 to section 115UB, the person responsible for making the payment shall, at the time of credit of such income to the account of 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 ten per cent.
It is proposed to amend the said section so as to provide that the income-tax on such payment shall be deducted––
(i) at the rate of ten per cent. in a case where the payee is a resident;
(ii) at the rates in force in a case where the payee is a nonresident (not being a company) or a foreign company.
This amendment will take effect from 1st June, 2016.
