Amendment of section 194LBA.
81. In section 194LBA of the Income-tax Act,––
(a) the words, brackets and letter “sub-clause (a) of” at both the places where they occur shall be omitted;
(b) in sub-section (2), for the words “five per cent.”, the words, brackets and letters “five per cent. in case of income of the nature referred to in sub-clause (a) and ten per cent. in case of income of the nature referred to in sub-clause (b), of the said clause” shall be substituted.
Notes on Clauses:
Clause 81 of the Bill seeks to amend section 194LBA of the Income-tax Act relating to certain income from units of a business trust.
The said section, inter alia, requires business trust to deduct tax on distribution of income, referred to in section 115UA, being of the nature referred to in sub-clause (a) of clause (23FC) or clause (23FCA) of section 10, at the rate of ten per cent. to a resident and at the rate of five per cent. to a non-resident (not being a company) or a foreign company, respectively.
It is proposed to amend the said section so as to omit the reference of sub-clause (a) of clause (23FC) of section 10 from the said section. Thus, liability to deduct tax shall be applicable on distribution of income referred to in section 115UA, being of the nature referred to in clause (23FC) or clause (23FCA) of section 10, to a resident and to a non-resident (not being a company) or a foreign company.
It is further proposed to amend sub-section (2) of the said section to provide that the tax is to be deducted at the rate of five per cent. in case of income the nature referred to in sub-clause (a) of clause (23FC) of section 10 and at the rate of ten per cent. in case of income of the nature referred to in sub-clause (b) of the said clause.
These amendments will take effect from 1st April, 2020.
