Tax Guide

What is Section 194LBA — TDS on income distributed by business trust (REIT/InvIT)?

Key mapping

Section 194LBA: TDS on income distributed by a Business Trust (REIT or InvIT) to unit holders. Rate varies: 10% for resident unit holders on distributed interest/dividend; 5% for non-residents on interest component.

Explanation

Section 194LBA of IT Act 1961 (consolidated under §393/§395 in IT Act 2025) applies to distributions by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). For resident unit holders: 10% TDS on distributed interest income; no TDS on dividend component if originating from exempt income. For non-resident unit holders: 5% TDS on interest component; 20% on other income. The trust is the deductor. Income from REITs/InvITs is increasingly common as these are listed on exchanges. Verify on the income-tax portal before filing.

Related terms and sections

194LBA REIT InvIT business trust 10 percent resident 5 percent non-resident TDS trust distribution

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Related sections

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All section references are sourced from the Income Tax Act 2025 (official gazette, incometaxindia.gov.in) and cross-referenced against CBDT's comparative statement. Always verify on the official portal before filing. This page is for reference only and does not constitute legal or tax advice.

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