Annual Information Statement – Interest from infrastructure debt fund

Annual Information Statement (AIS) – Interest from infrastructure debt fund under section 115A(1)(a)(iia)

On 1^st November 2021, the Income Tax Department launched a comprehensive statement named ‘Annual Information Statement’. Once fully validated and operational, Annual Information Statement (AIS) will replace the existing Form 26AS.

Along with AIS, the Income Tax Department also launched a summarized statement named ‘Taxpayer Information Summary’.

AIS caters various financial information, one such information covered under AIS is ‘interest from infrastructure debt fund’. The said income category is taken up and briefed in the current article.

Provisions relating to interest from infrastructure debt fund-

Before understanding the AIS provisions, let’s take a look at the provisions covering taxability of interest from infrastructure debt fund, the same is summarized hereunder-

1. Taxable section –

As per section 115A(1)(a)(iia) of the Income Tax Act a specific income-tax is payable when the total income of a non-resident or a foreign company includes interest income from an infrastructure debt fund referred under section 10(47).

2. Exemption section-

Section 10(47) of the Income Tax Act exempts any income of an infrastructure debt fund which is set up as per guidelines prescribed under rule 2F of the Income Tax Rules.

3. Section covering deduction of TDS–

As per section 194LB, the person making payment of interest income from an infrastructure debt fund to a non-resident or a foreign company is liable to deduct TDS @5%.

AIS information source for ‘interest from infrastructure debt fund’-

As stated above, person making payment of interest from infrastructure debt fund is required to deduct TDS as per provisions of section 194LB. Accordingly, the said person is required to file TDS statement/ return in Form 27Q on quarterly basis. Correspondingly, the deductor is also required to furnish a TDS certificate in Form 16A to the receiver/ deductee.

Information provided by the deductor in TDS statement/ return in Form 27Q will be taken as source of information under AIS for the category ‘interest from infrastructure debt fund’.

AIS processing for ‘interest from infrastructure debt fund’-

Based on the information captured from deductor’s TDS return, the AIS will reflect the income in following manner-

1. Interest earned from infrastructure debt fund will be taxable in the hands of the receiver; and

2. AIS will reflect the amount as taxable under the head ‘Income from other source’.