What is Section 194LB — TDS on interest from infrastructure bonds? | IT / TDS | RushTax

Q: What is Section 194LB — TDS on interest from infrastructure bonds?

Section 194LB: TDS at 5% on interest paid to non-resident investors (including FIIs) on long-term infrastructure bonds. Introduced to encourage foreign investment in Indian infrastructure.

Explanation

Section 194LB of IT Act 1961 (consolidated under §393/§395 in IT Act 2025) applies to interest paid by an Indian infrastructure company on long-term infrastructure bonds to non-resident investors. TDS rate: 5% (concessional to attract foreign investment). Applies to bonds approved under §80CCF (withdrawn) or qualifying infrastructure bonds. If DTAA provides a lower rate, the lower rate applies. The 5% rate is significantly lower than the standard 20% withholding on other non-resident interest. Verify on the income-tax portal before filing.

Related terms and sections

194LB infrastructure bonds non-resident TDS 5 percent FII interest infrastructure finance

Confidence: medium. Verify against primary sources (incometaxindia.gov.in, cbic-gst.gov.in, mca.gov.in) before filing.

Explanation

Related terms and sections

194LB infrastructure bonds non-resident TDS 5 percent FII interest infrastructure finance

Confidence: medium. Verify against primary sources (incometaxindia.gov.in, cbic-gst.gov.in, mca.gov.in) before filing.