TDS on business trust distributions: payer must deduct tax on interest, dividends and rent to unit holders. TDS under Section 194LBA requires the payer to deduct tax on distributions by business trusts at the time of credit or payment: resident unit holders are subject to a 10% deduction and non resident unit holders or foreign companies to a reduced rate for certain receipts. Interest, dividend and rental distributions are each subject to withholding at the specified resident and non resident rates; interest on external commercial borrowings is eligible for a reduced withholding rate under the separate ECB provision and taxed in the hands of non residents under the relevant non resident tax provision.