Annual Information Statement (AIS)– Income in respect of units of non-resident u/s 115A(1)(a)(iiab)
Recently, the Income Tax Department rolled out the Annual Information Statement on its compliance portal. It is a tool that provides a comprehensive view of all the financial transactions undertaken by the taxpayer in a respective financial year.
Annual Information Statement sums up and reflects all the information received/ collected by the Income Tax Department from various financial entities like banks; companies; mutual fund houses; employers etc. Further, to ease up the Income Tax Return filing, the Annual Information Statement also provides a simplified and summarized Taxpayer Information Summary.
The current article provides a briefing of one of the information categories of the Annual Information Statement, namely, Income in respect of units of non-resident u/s 115A(1)(a)(iiab)’.
Income referred under the AIS information category ‘Income in respect of units of non-resident u/s 115A(1)(a)(iiab)-
Section 115A(1)(a)(iiab) of the Income Tax Act, 1961 simply states that income of interest earned, out of the ‘specified mutual fund’, by a non-resident is to be taxed as per section 115A(1)(a).
Please note, here, ‘specified mutual fund’ means-
- Units of a mutual fund specified under section 10(23D); or
- The specified company referred under section 10(35).
TDS provisions applicable to ‘Income in respect of units of non-resident u/s 115A(1)(a)(iiab)-
As per TDS provisions of section 196A of the Income Tax Act, any person responsible for paying income to a non-resident in respect of specified mutual fund (as stated above) is required to deduct TDS within earlier of the following time limit-
- At the time of credit of income; or
- At the time of payment by any mode.
The payer/ deductor is required to deduct TDS on the above transaction @20%. After deducting TDS u/s 196A, the deductor is required to-
- File quarterly TDS statement/ return in Form 27Q; and
- Issue TDS certificate in Form 16A to the deductee.
Information source and AIS processing for the category ‘income in respect of units of non-resident u/s 115A(1)(a)(iiab)-
Annual information statement (AIS) will collect the information in the said category on the basis of the TDS return furnished in Form 27Q by the deductor.
AIS processing of the said information category will be carried out in the following manner-
- Income earned from the specified units will be treated as taxable in the hands of the receiver; and
- Such income will be taxable under the head ‘Income from other sources’.
Author Bio
TDS deducted on MF dividend under Section 115A(1)(a)(i) at 20%+cess. Can I claim refund since my Indian income is less than 2.5 lakhs>