Finance Minister Nirmala Sitharaman on Tuesday announced that 20 per cent TDS applicable on the repurchase of mutual fund units will be withdrawn.
According to the Finance Bill, 2024, the Clause 55 of the Bill seeks to omit section 194F of the Income-tax Act relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India (UTI).
The bill further mentioned that the said section provides that 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 (20%). It is proposed to omit the said section 194F. This amendment will take effect from October 1, 2024.
Previously, in the Budget 2020, FM Nirmala Sitharaman proposed the insertion of Section 194K in the Finance Act 2020. This section includes a tax deduction on the amount paid on the units of mutual funds, with a limit, to any resident individual.
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