Investment fund unit income escapes tax withholding when it is not chargeable to tax in the recipient's hands.

Section 393(4), Table entry 14, exempts income relating to units of an Investment Fund from tax deduction at source where the income payable to the unit holder is not chargeable to tax under the Income-tax Act, 2025. Income distributions from such funds are ordinarily subject to TDS under section 393(2), Table entry 8, but withholding is required only for income chargeable to tax in the recipient's hands.

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