Exempt income of specified funds from securities receives no deduction at source despite ordinary withholding requirements.

Income of a Specified Fund from securities is ordinarily subject to deduction of tax at source. No tax is required to be deducted where the securities income is exempt under Schedule VI. Non-deduction requires that the payment be income from the specified securities category and that such income qualify for the relevant Schedule VI exemption. The withholding exemption follows the underlying income exemption.

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