https://v2.webnotes.in/tags/tds/Recent content in TDS on WebNotesHugoen-INFri, 19 Jun 2026 00:00:00 +0000https://v2.webnotes.in/section-194k/Tue, 19 May 2026 00:00:00 +0000https://v2.webnotes.in/section-194k/<p><strong>Section 194K of the Income Tax Act 1961</strong> mandates 10% TDS on <a href="https://v2.webnotes.in/idcw/">IDCW (Income Distribution cum Capital Withdrawal)</a> distributions from mutual fund schemes to resident individual investors. The provision was inserted by the Finance Act 2020 as part of the broader reform that abolished the Dividend Distribution Tax (DDT) and shifted dividend taxation to the recipient. Section 194K is the TDS arm of this framework, ensuring tax is collected at source by the AMC before the dividend reaches the unitholder.</p>https://v2.webnotes.in/form-26as-mf-tds/Mon, 18 May 2026 00:00:00 +0000https://v2.webnotes.in/form-26as-mf-tds/<p><strong>Form 26AS</strong> is the Income Tax Department&rsquo;s consolidated TDS statement showing all tax deducted at source against a taxpayer&rsquo;s PAN. For mutual fund investors, Form 26AS captures:</p> <ul> <li><strong>TDS on IDCW</strong> under <a href="https://v2.webnotes.in/section-194k/">Section 194K</a> (mutual fund dividend TDS for resident individuals).</li> <li><strong>TDS on NRI redemptions</strong> under <a href="https://v2.webnotes.in/tds-nri-mf-redemption/">Section 195</a> (for non-resident investors).</li> <li><strong>TDS on other MF-related payments</strong>: Rare, but tracked.</li> </ul> <p>For Indian retail investors filing ITR, Form 26AS is essential for claiming the correct TDS credit against final tax liability.</p>https://v2.webnotes.in/debt-mf-vs-fd-post-2023/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/debt-mf-vs-fd-post-2023/<p>The Finance Act 2023 introduced a fundamental change to the taxation of debt mutual funds in India, effective from 1 April 2023. Prior to this amendment, gains on debt mutual fund units held for more than 36 months were classified as long-term capital gains (LTCG) and taxed at 20% with indexation benefit. From 1 April 2023, gains on specified mutual funds (those with domestic equity exposure of 35% or less) are taxed at the investor&rsquo;s applicable income tax slab rate irrespective of holding period, under the new Section 50AA of the Income Tax Act, 1961.</p>https://v2.webnotes.in/form-26as-mutual-fund-tds/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/form-26as-mutual-fund-tds/<p><strong>Form 26AS</strong> is an annual consolidated tax credit statement maintained by the Income Tax Department of India for each PAN holder, showing all Tax Deducted at Source (TDS), Tax Collected at Source (TCS), advance tax payments, and self-assessment tax payments credited against the taxpayer&rsquo;s account. For <a href="https://v2.webnotes.in/mutual-fund/">mutual fund</a> investors, Form 26AS is relevant primarily because it records TDS deducted by AMCs under <strong>Section 194K</strong> on Income Distribution cum Capital Withdrawal (IDCW) payouts when the cumulative IDCW paid by a single AMC to an investor exceeds Rs 5,000 in a financial year.</p>https://v2.webnotes.in/how-to-claim-mutual-fund-dividends-coin/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/how-to-claim-mutual-fund-dividends-coin/<p>Mutual fund investors on <a href="https://v2.webnotes.in/zerodha-coin/">Zerodha Coin</a> who choose the <strong>IDCW plan</strong> (Income Distribution cum Capital Withdrawal &ndash; formerly called the Dividend plan) receive periodic cash payouts from the fund&rsquo;s distributable surplus. These payouts are automatically credited to the investor&rsquo;s registered bank account; no manual claim process is required.</p> <p>This guide explains what IDCW means, how it works for demat-held Coin units, and how to ensure you receive and report payouts correctly.</p>https://v2.webnotes.in/how-to-receive-reinvest-dividend-zerodha/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/how-to-receive-reinvest-dividend-zerodha/<p>A <strong>dividend</strong> is a distribution of a company&rsquo;s profits to its shareholders, typically declared by the board of directors and approved at the Annual General Meeting (AGM) or Extraordinary General Meeting (EGM). Dividends in India are paid in cash directly to the registered bank account of the shareholder; no action is required from the shareholder to receive a dividend.</p> <p><a href="https://v2.webnotes.in/zerodha/">Zerodha</a> clients receive dividends automatically from the company&rsquo;s Registrar and Transfer Agent (RTA) via NEFT/RTGS to the bank account linked to their Zerodha demat account. Zerodha does not charge any fee for dividend credit.</p>https://v2.webnotes.in/liquid-fund-vs-savings/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/liquid-fund-vs-savings/<p><strong>Liquid mutual funds</strong> and <strong>bank savings accounts</strong> are both commonly used for parking short-term cash in India. Liquid funds are debt-oriented <a href="https://v2.webnotes.in/mutual-fund/">mutual fund</a> schemes regulated by the <a href="https://v2.webnotes.in/sebi-investment-management-department/">Securities and Exchange Board of India</a> , investing in money market instruments with a maturity of up to 91 days. Bank savings accounts are deposit products regulated by the Reserve Bank of India (RBI), offering a fixed or floating interest rate on balances maintained.</p> <p>Both instruments provide ready access to funds, but they differ in return potential, insurance coverage, taxation, and minimum balance requirements.</p>https://v2.webnotes.in/nri-mf-investor-nre/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/nri-mf-investor-nre/<p>A <strong>non-resident Indian (NRI) investing in mutual funds through the NRE route</strong> channels funds held in a Non-Resident External (NRE) rupee bank account into SEBI-registered mutual fund schemes. The NRE route is the preferred pathway for NRIs who remit foreign earnings to India, because redemption proceeds and dividends are freely repatriable in full without any annual cap and without requiring a chartered accountant certificate. The route operates under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and is treated as a repatriable investment in the mutual fund&rsquo;s records.</p>https://v2.webnotes.in/nri-mf-investor-nro/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/nri-mf-investor-nro/<p>A <strong>non-resident Indian (NRI) investing in mutual funds through the NRO route</strong> uses a Non-Resident Ordinary rupee bank account as the source and destination of investment funds. The NRO route is distinct from the NRE route in that redemption proceeds and dividends are subject to limited repatriation and attract higher withholding tax rates. Understanding the NRO route is essential for NRIs who have legacy Indian income (rent, pension, interest) or who receive funds from within India that cannot be credited to a <a href="https://v2.webnotes.in/nri-mf-investor-nre/">Non-Resident External (NRE) account</a> .</p>https://v2.webnotes.in/mf-idcw-tds-residents/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/mf-idcw-tds-residents/<p><strong>TDS on IDCW from mutual funds for resident investors</strong> is governed by Section 194K of the Income Tax Act 1961, introduced by the Finance Act 2020 effective 1 April 2020. Section 194K requires a mutual fund to deduct tax at source at <strong>10%</strong> on any income (specifically IDCW &ndash; Income Distribution cum Capital Withdrawal, formerly called dividend) credited or paid to a resident investor, where the aggregate IDCW from that mutual fund scheme exceeds <strong>Rs 5,000</strong> in a financial year. IDCW income is included in the investor&rsquo;s total income under Section 56(2)(i) and taxed at the applicable slab rate; the 10% TDS is a withholding that is credited against the investor&rsquo;s total tax liability.</p>https://v2.webnotes.in/nri-mf-tds-section-195/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/nri-mf-tds-section-195/<p><strong>Tax Deducted at Source (TDS) on mutual fund redemptions for Non-Resident Indians (NRIs)</strong> is governed by Section 195 of the Income Tax Act 1961. Unlike resident investors who are not subject to TDS on capital gains from mutual fund redemptions, NRI investors are subject to TDS withheld by the fund house (AMC) at the time of redemption, before the net proceeds are credited to the investor&rsquo;s NRE or NRO account. The TDS rate depends on the type of capital gain (short-term or long-term) and the fund classification (equity-oriented or non-equity), and is applied on gross redemption proceeds without deducting the Rs 1,25,000 annual LTCG exemption. Excess TDS can be reclaimed by the NRI by filing an income-tax return in India.</p>