Section 194K → Section 216
TDS on income in respect of units (Mutual Funds)
Quick Answer
Section 194K of the Income Tax Act, 1961 (TDS on income in respect of units (Mutual Funds)) corresponds to Section 216 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 194K
In the 1961 statute, Section 194K deals with TDS on income in respect of units (mutual funds). TDS @ 10% on dividends paid by mutual funds exceeding Rs. 5,000 in a year.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 194K is retained and renumbered as Section 216 of the Income-tax Act, 2025. Retained. Captures mutual fund dividend distributions after the abolition of DDT.
The transition impact on Section 194K is assessed as Very High. Affects millions of retail mutual fund investors.
Sec 194K
Provision Summary
TDS @ 10% on dividends paid by mutual funds exceeding Rs. 5,000 in a year.
Sec 216
Provision Summary
Retained. Captures mutual fund dividend distributions after the abolition of DDT.
Key Changes & Highlights
- Capital gains on the sale of units are strictly exempt from this TDS.
Related Sections
Frequently Asked Questions
Which subject does Section 194K of the 1961 Act cover?
Section 194K of the Income Tax Act, 1961 covers TDS on income in respect of units (mutual funds). TDS @ 10% on dividends paid by mutual funds exceeding Rs. 5,000 in a year.
What is the new section number for Section 194K under the Income-tax Act, 2025?
Section 194K of the Income Tax Act, 1961 maps to Section 216 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Captures mutual fund dividend distributions after the abolition of DDT.
How does the Income-tax Act, 2025 affect Section 194K in practice?
The transition impact for Section 194K is rated Very High. Affects millions of retail mutual fund investors.
What is new about Section 194K under the Income-tax Act, 2025?
Capital gains on the sale of units are strictly exempt from this TDS. These points are specific to Section 194K (TDS on income in respect of units (Mutual Funds)).
Disclaimer: This mapping of Section 194K (TDS on income in respect of units (Mutual Funds)) to Section 216 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 194K is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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