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.
Adhil Shetty, CEO of Bankbazaar.com, says, this has been done as a part of the provisions contained in the Finance Bill, 2024, which seeks to omit Section 194F of the Income-tax Act. Clause 55 of the Finance Bill, 2024, read with its First Schedule, however, proposes to omit Section 194F, which imposes a 20% TDS obligation in case of payments for repurchase of mutual fund units or units of the UTI.
“The said sub-section provides that in the case of such payment, the person responsible for making it shall, at the time of payment, deduct income tax thereon at 20% only if the amount of payment, or as the case may be, the aggregate amount of such payments, made during any previous year exceeds Rs. 1 lakh. The new amendment would remove this requirement, reducing the tax burden on mutual fund investors. This announcement could be seen as a relief for mutual fund investors,” he stated.
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“The withdrawal of the 20% TDS rate on mutual fund unit repurchase marks a step towards easing the tax burden for investors. This aligns with the overall budget’s focus on inclusive growth, employment generation, and infrastructure development, aimed at creating ample opportunities and fostering a resilient economy,” said Feroze Azeez, Deputy CEO, Anand Rathi Wealth Limited
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