Investment fund unit income requires withholding on taxable distributions to eligible non-resident holders, excluding the exempt component.

Tax deduction at source applies when an investment fund specified in section 224 credits or pays taxable income relating to its units to a non-resident unit holder, other than a company, or a foreign company. The fund must deduct tax at the rates in force at the earlier of credit or payment. No monetary threshold applies. The withholding obligation is confined to the taxable component of unit income and excludes the proportion exempt under Schedule V.

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