Section 194LBC of Income Tax Act for AY 2023-24

Section 194LBC of Income Tax Act 1961 amended by Finance Act and Income-tax Rules. Income in respect of investment in securitization trust.

Amended and updated notes on section 194LBC of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Income in respect of investment in securitization trust.

Chapter XVII (Sections 190 to 234G) of the Income Tax Act 1961 deals with the provisions related to collection and recovery of tax. Section 194LBC of IT Act 1961 provides for Income in respect of investment in securitization trust.

Recently, we have discussed in detail section 194LBB (Income in respect of units of investment fund) of IT Act 1961. Today, we learn the provisions of section 194LBC of Income-tax Act 1961. The amended provision of section 194LBC is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 194LBC of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-194LBC: Income in respect of investment in securitization trust

Section 194LBC(1) of Income Tax Act

Where any income is payable to an investor, being a resident, in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA, the person responsible for making the payment shall, at the time of credit of such income to the account of the 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—

  • (i) twenty-five per cent, if the payee is an individual or a Hindu undivided family;
  • (ii) thirty per cent, if the payee is any other person.

Section 194LBC(2) of Income Tax Act

Where any income is payable to an investor, being a non-resident (not being a company) or a foreign company, in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA, the person responsible for making the payment shall, at the time of credit of such income to the account of the 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 rates in force.

Explanation: For the purposes of this section,—

(a) “investor” shall have the meaning assigned to it in clause (a) of the Explanation occurring after section 115TCA;

(b) where any income as aforesaid 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.


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