What is Tax on distributed income to investors? What is Interest payable for non-payment of tax? Section 115TA and 115TB of Income Tax Act 1961

Tax on distributed income to investors and Interest payable for non-payment of tax are defined under sections 115TA and 115TB of Income Tax Act 1961. Provisions under these Sections are :

Section 115TA of Income Tax Act "Tax on distributed income to investors"

115TA. (1) Notwithstanding anything contained in any other provisions of the Act, any amount of income distributed by the securitisation trust to its investors shall be chargeable to tax and such securitisation trust shall be liable to pay additional income-tax on such distributed income at the rate of-

(i) twenty-five per cent on income distributed to any person being an individual or a Hindu undivided family;

(ii) thirty per cent on income distributed to any other person:

Provided that nothing contained in this sub-section shall apply in respect of any income distributed by the securitisation trust to any person in whose case income, irrespective of its nature and source, is not chargeable to tax under the Act.

(2) The person responsible for making payment of the income distributed by the securitisation trust shall be liable to pay tax to the credit of the Central Government within fourteen days from the date of distribution or payment of such income, whichever is earlier.

(3) [***]

(4) No deduction under any other provisions of this Act shall be allowed to the securitisation trust in respect of the income which has been charged to tax under sub-section (1).

(5) Nothing contained in this section shall apply in respect of any income distributed by a securitisation trust to its investors on or after the 1st day of June, 2016.

 

Section 115TB of Income Tax Act "Interest payable for non-payment of tax"

115TB. Where the person responsible for making payment of the income distributed by the securitisation trust and the securitisation trust fails to pay the whole or any part of the tax referred to in sub-section (1) of section 115TA, within the time allowed under sub-section (2) of that section, he or it shall be liable to pay simple interest at the rate of one per cent every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.