TDS on investment fund unit income: withholding required when income is credited or paid to unit holders.

Where income payable to a unit holder of a specified investment fund is paid or credited, the payer must deduct tax at source at the prescribed rate at the earlier of credit to the payee's account or payment; credits to any account in the payer's books, including a suspense account, are deemed to be credit to the payee and trigger the same withholding obligation. The withholding excludes that proportion of income matching the nature of the specified exempt income.

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