Withholding tax on business trust distributions to non-resident unit holders varies by interest or dividend classification.

Tax deduction at source applies to distributed income of a business trust paid or credited to non-resident unit holders or foreign companies, where the income falls within the specified Schedule V categories. The business trust must deduct tax at the earlier of credit or payment. Interest income is subject to deduction at 5%, and dividend income at 10%. No threshold limit applies, so every qualifying payment attracts withholding.

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