Draft Income Tax Rule 210, 211:No TDS on UTI Units of Non-Residents u/s 393(2) Sl. 10 r/w 393(4) Sl. 15; Declaration for Nil TDS u/s 393(6)
Rules 210 and 211 of the Draft Income-tax Rules, 2026 lay down conditions for non-deduction of tax at source (TDS) in specified cases and prescribe procedural safeguards for declarations. Rule 210 provides that income payable in respect of units of the Unit Trust of India to a non-resident Indian or a non-resident Hindu undivided family shall not be subject to TDS where such units were acquired out of funds from a Non-Resident (External) account maintained with a bank in India or by remittance in foreign currency, in accordance with the Foreign Exchange Management Act, 1999 and related rules. Rule 211 prescribes that a declaration under section 393(6) for receipt of certain incomes without deduction of tax must be furnished in Form No. 121, either electronically through the prescribed system after verification or in paper form. The payer must allot a unique identification number (UIN) to each declaration received every quarter, in accordance with procedures specified by the Director-General of Income-tax (Systems), and report the particulars in the quarterly TDS statement under rule 219, even if no tax has been deducted. Income-tax authorities may call for such declarations within seven years from the end of the relevant tax year for verification or proceedings under the Act.
Extract of Rule No. 210, 211 of Draft Income-tax Rules, 2026
Rule 210
Condition for no deduction of tax at source from income in respect of units of nonresidents referred to in section 393(2) (Table: Sl. No. 10) read with section 393(4) (Table: Sl. No. 15) of the Act
Income payable in respect of units of the Unit Trust of India to a non-resident Indian or a nonresident Hindu undivided family shall not be subject to deduction of tax at source, where the units have been acquired from the Unit Trust of India out of the funds in a non-resident (External) account maintained with any bank in India or by remittance of funds in foreign currency, in accordance, in either case, with the provisions of the Foreign Exchange Management Act , 1999 (42 of 1999), and the rules made thereunder.
Rule 211
Declaration by person claiming receipt of certain incomes without deduction of tax under section 393(6) of the Act.
(1) A declaration under Section 393(6) shall be furnished in Form No. 121.
(2) The declaration referred to in sub-rule (1) may be furnished in any of the following manners, namely:—
(a) electronically through the facility provided by Director General of Income-tax (Systems) after duly verifying through an electronic process or
(b) in paper form.
(3) The person responsible for paying any income or sum of any nature referred to in section 393(6), shall allot a unique identification number to each declaration received by him in Form No. 121 during every quarter of the financial year in accordance with the procedures, formats and standards specified by the Director-General of Income-tax (Systems).
(4) The person responsible for paying any income or sum of any nature referred to in section 393(6) shall furnish the statement of deduction of tax referred to in rule 219 containing the particulars of declaration received by him during each quarter of the tax year along with the unique identification number referred to in sub-rule (3), regardless of the fact that no tax has been deducted in the said quarter.
(5) An income-tax authority may, before the end of seven years from the end of the tax year in which the declaration referred to in sub-rule (2)(b) has been received, require the person referred to in sub-rule (3) to furnish or make available the declaration for the purposes of verification or any proceeding under the Act.
