Insertion of new section 194K.
80. After section 194J of the Income-tax Act, the following section shall be inserted, namely:–
Income in respect of units.
‘194K. Any person responsible for paying to a resident any income in respect of––
(a) units of a Mutual Fund specified under clause (23D) of section 10; or
(b) units from the Administrator of the specified undertaking; or
(c) units from the specified company,
shall, at the time of credit of such income to the account of the payee or at the time of payment thereof by any mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.:
Provided that the provisions of this section shall not apply where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person responsible for making the payment to the account of, or to, the payee does not exceed five thousand rupees.
Explanation 1.-For the purposes of this section,-
(a ) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002; (58 of 2002)
(b) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002; (58 of 2002)
(c) “specified undertaking” shall have the meaning assigned to it in clause (i) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. (58 of 2002)
Explanation 2.––For the removal of doubts, it is hereby clarified that where any income referred to in this section is credited to any account, whether called "suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be the credit of such income to the account of the payee and the provisions of this section shall apply accordingly.’.
Notes on Clauses:
Clause 80 of the Bill seeks to insert a new section 194K relating to income in respect of units.
The said section, inter alia, provides that any person responsible for paying to a resident any income in respect of––
(i) units of a Mutual Fund specified under clause (23D) of section 10; or
(ii) units from the Administrator of the specified undertaking; or
(iii) units from the specified company, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof by any mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.
It is further proposed to provide that the provisions of the said section shall not apply where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person responsible for making the payment to the account of, or to, the payee does not exceed five thousand rupees.
It is also proposed to define the expressions “Administrator”, “specified company” and “specified undertaking” and to clarify that where any income referred to in the said section is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.
This amendment will take effect from 1st April, 2020.
