Insertion of new section 194LB:
After section 194LA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June 2011.
Where any interest is payable by an infrastructure debt fund referred to in S. 10(47), to a non-resident which is not a company, or is not a foreign company then the same is subject to TDS. 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 cheque or draft or by any other mode, whichever is earlier deduct income-tax there on at the rate of 5% (introduced w.e.f. 1.6.2011 by Finance Act 2011).
The updated chart of tax Deduction at Source for FY 2015-16 or AY 2016-17 is as under:
| Section | Nature of Payment | Rate-HUF/Ind % | Rate-Others % |
| 194LB | Interest from an Infrastructure Bond | 5 | 5 |
Reference:
As Per Section 194LB, of the Income Tax Act 1961, Income by way of interest from infrastructure debt fund.
- Where any income by way of interest is payable to a non-resident, not being a company, or to a foreign company, by an infrastructure debt fund referred to in clause (47) of section 10, 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 five per cent.