Section 115UA of Income Tax Act "Tax on income of unit holder and business trust"
115UA. (1) Notwithstanding anything contained in any
other provisions of this Act, any income distributed by a
business trust to its unit holders shall be deemed to be of
the same nature and in the same proportion in the hands of
the unit holder as it had been received by, or accrued to,
the business trust.
(2) Subject to the provisions of section 111A and section
112, the total income of a business trust shall be charged
to tax at the maximum marginal rate.
(3) If in any previous year, the distributed income or any
part thereof, received by a unit holder from the business
trust is of the nature as referred to in 1[sub-clause (a)
of] clause (23FC) or clause (23FCA) of section 10, then,
such distributed income or part thereof shall be deemed to
be income of such unit holder and shall be charged to tax as
income of the previous year.
(4) Any person responsible for making payment of the income
distributed on behalf of a business trust to a unit holder
shall furnish a statement to the unit holder and the
prescribed authority, within such time and in such form and
manner as may be prescribed, giving the details of the
nature of the income paid during the previous year and such
other details as may be prescribed.
115UB. (1) Notwithstanding anything contained in any
other provisions of this Act and subject to the provisions
of this Chapter, any income accruing or arising to, or
received by, a person, being a unit holder of an investment
fund, out of investments made in the investment fund, shall
be chargeable to income-tax in the same manner as if it were
the income accruing or arising to, or received by, such
person had the investments made by the investment fund been
made directly by him.
(2) Where in any previous year, the net result of
computation of total income of the investment fund [without
giving effect to the provisions of clause (23FBA) of section
10] is a loss under any head of income and such loss cannot
be or is not wholly set off against income under any other
head of income of the said previous year, then,-
2[(i) out of such loss, the loss arising to the investment
fund as a result of the computation under the head "Profits
and gains of business or profession", if any, shall be,-
(a) allowed to be carried forward and it shall be set off by
the investment fund in accordance with the provisions of
Chapter VI; and
(b) ignored for the purposes of sub-section (1);
(ii) the loss other than the loss referred to in clause (i),
if any, shall also be ignored for the purposes of
sub-section (1), if such loss has arisen in respect of a
unit which has not been held by the unit holder for a period
of atleast twelve months.]
3[(2A) The loss other than the loss under the head "Profits
and gains of business or profession", if any, accumulated at
the level of investment fund as on the 31st day of March,
2019, shall be,-
(i) deemed to be the loss of a unit holder who held the unit
on the 31st day of March, 2019 in respect of the investments
made by him in the investment fund, in the same manner as
provided in sub-section (1); and
(ii) allowed to be carried forward by such unit holder for
the remaining period calculated from the year in which the
loss had occurred for the first time taking that year as the
first year and shall be set off by him in accordance with
the provisions of Chapter VI:
Provided that the loss so deemed under this sub-section
shall not be available to the investment fund on or after
the 1st day of April, 2019.]
(3) The income paid or credited by the investment fund shall
be deemed to be of the same nature and in the same
proportion in the hands of the person referred to in
sub-section (1), as if it had been received by, or had
accrued or arisen to, the investment fund during the
previous year subject to the provisions of sub-section (2).
(4) The total income of the investment fund shall be charged
to tax-
(i) at the rate or rates as specified in the Finance Act of
the relevant year, where such fund is a company or a firm;
or
(ii) at maximum marginal rate in any other case.
(5) The provisions of Chapter XII-D or Chapter XII-E shall
not apply to the income paid by an investment fund under
this Chapter.
(6) The income accruing or arising to, or received by, the
investment fund, during a previous year, if not paid or
credited to the person referred to in sub-section (1), shall
subject to the provisions of sub-section (2), be deemed to
have been credited to the account of the said person on the
last day of the previous year in the same proportion in
which such person would have been entitled to receive the
income had it been paid in the previous year.
(7) The person responsible for crediting or making payment
of the income on behalf of an investment fund and the
investment fund shall furnish, within such time as may be
prescribed, to the person who is liable to tax in respect of
such income and to the prescribed income-tax authority, a
statement in the prescribed form and verified in such
manner, giving details of the nature of the income paid or
credited during the previous year and such other relevant
details, as may be prescribed.
Explanation 1.-For the purposes of this Chapter,-
(a) "investment fund" means any fund established or
incorporated in India in the form of a trust or a company or
a limited liability partnership or a body corporate which
has been granted a certificate of registration as a Category
I or a Category II Alternative Investment Fund and is
regulated under the Securities and Exchange Board of India
(Alternative Investment Fund) Regulations, 2012, made under
the Securities and Exchange Board of India Act, 1992 (15 of
1992);
(b) "trust" means a trust established under the Indian
Trusts Act, 1882 (2 of 1882) or under any other law for the
time being in force;
(c) "unit" means beneficial interest of an investor in the
investment fund or a scheme of the investment fund and shall
include shares or partnership interests.
Explanation 2.-For the removal of doubts, it is hereby
declared that any income which has been included in total
income of the person referred to in sub-section (1) in a
previous year, on account of it having accrued or arisen in
the said previous year, shall not be included in the total
income of such person in the previous year in which such
income is actually paid to him by the investment fund.