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of <h1>Infrastructure debt fund TDS rate stays 5% for non-residents under new Clause 393(2)</h1> The Income Tax Bill 2025's Clause 393(2) replaces Section 194LB of the Income-tax Act 1961, maintaining the 5% TDS rate on interest payments from infrastructure debt funds to non-resident investors. Both provisions target the same payees (non-resident individuals and foreign companies) and payers (infrastructure debt funds), with identical timing requirements for deduction at credit or payment, whichever is earlier. The primary change involves updating the reference from Section 10(47) to Schedule VII for defining infrastructure debt funds, reflecting legislative reorganization rather than substantive modification. The new provision integrates into a broader harmonized TDS framework, potentially offering greater administrative clarity and flexibility for future amendments while maintaining the concessional tax treatment designed to attract foreign investment in infrastructure.
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