Explanation
Section 194LBB of IT Act 1961 (consolidated under §393 in IT Act 2025) applies to Alternative Investment Funds (AIFs) — Category I (VC funds, SME funds, social funds) and Category II (PE funds, debt funds). TDS on income passed through to investors: 10% for residents, 30% for non-residents (or applicable DTAA rate). The pass-through taxation regime under §115UB means the investor is taxed at their slab rate on the share of income. Category III AIFs are taxed directly at the fund level, not passed through. Verify on the income-tax portal before filing.