Tax withholding on investment fund unit income applies only where the recipient's distributed income is chargeable to tax.

Income in respect of units of an Investment Fund is excluded from tax deduction at source where it is not chargeable to tax under the Income-tax Act, 2025. Tax deduction at source is required only where the income payable to the recipient is chargeable to tax. Investment Fund distributions that are not taxable in the recipient's hands do not attract a deduction obligation.

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