Tax withholding exemption for investment fund unit income applies when the recipient's income is not chargeable under the Act.

Income in respect of units of an Investment Fund is not subject to deduction of tax at source where it is not chargeable to tax under the Income-tax Act, 2025. The exception applies to income otherwise covered by the withholding requirement for investment-fund unit income. Tax deduction is required only where the distributed income is chargeable to tax in the hands of the recipient unit holder.

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