Insertion of new section 194F
40. After section 194E of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 1991, namely: —
“194F. Payments on account of repurchase of units by Mutual Fund or Unit Trust of India.—The person responsible for paying to any person any amount referred to in sub-section (2) of section 80CCB shall, at the time of payment thereof, deduct income-tax thereon at the rate of twenty per cent.”
Section 194F deals with tax deduction on payment relating to repurchase of units of Mutual fund or Unit Trust of India. Under this section, UTI is liable to deduct tax at source on repurchase of units issued by them if the amount is the one that is referred to in Section 80CCB of the Act.
TDS shall be deducted at the rate of 20% on such income. TDS shall be deducted at the time of making any payment.
TDS From Payments on Account of Repurchase of Units by Mutual Funds or UTI
Person Responsible to Deduct Tax:
Mutual funds or UTI
Category of Payee:
Individuals and HUF
Rate of Deduction of Tax:
20%
Time for Deduction of Tax:
At the time of the payment / return of such investments.
Time for Deposit of TDS:
In case of deduction by or on behalf of Government, on the same day.
Other cases- within 1 week from the last day of the month of tax deduction.
Reference:
As Per Section 194F, of the Income Tax Act, 1961-
Payments on account of repurchase of units by Mutual Fund or Unit Trust of India.
194F. The person responsible for paying to any person any amount referred to in sub-section (2) of section 80CCB shall, at the time of payment thereof, deduct income-tax thereon at the rate of twenty per cent.