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<h1>TDS on offshore fund unit income: withholding required at specified rates with timing rules and limited exemptions.</h1> TDS applies to income of an Offshore Fund from units purchased in foreign currency and to long term capital gains on transfer of such units. The payer must deduct tax at the specified withholding rates, with transitional rates for transfers before and on or after the amendment date, and add surcharge where applicable. Deduction must occur at the earlier of payment or credit. Income exempt as receipts on units and long term capital gains qualifying for statutory exemption are not subject to withholding.