Page 14 - Budget_2020

Union Budget 2020
Amendment of Sec 194LBA and Insertion of New Sec 194K (TDS on Dividends)
Amend Sec 194LBA to provide that: -
 TDS on Dividend @ 10% for residents
 TDS on Dividend and interest @ 10% and 5% respectively for non-resident
 Introduce a new Sec 194K to provide as follows: -
• TDS on dividends from units of a specified mutual fund, units from the Administrator of the
specified undertaking or units of specified company @ 10%
• Threshold limit for deduction is Rs. 5,000
• Administrator, specified undertaking and specified company shall be as mentioned in Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002

1st April, 2020

This is a consequential amendment post abolition of dividend distribution tax

Widening the Scope of TCS on LRS
In order to widen the tax base for Tax Collected at Source (“TCS”), Sec 206C is proposed to be amended to
levy TCS in the following cases:
• In case of overseas remittance under the Liberalised Remittance Scheme (LRS) of RBI, amount received
by authorised dealer is Rs. 7 lakhs or more in a FY
• In case of a seller of an overseas tour program package, any amount received from any buyer of such
package
• The rate of TCS shall be 5%
• In non- PAN/Aadhaar cases, the rate shall be 10%
• Provisions shall not be applicable if the seller is liable to collect TCS under any other provisions or the
buyer being State/Central Government or other authorities as notified by Central Government

1st April 2020

Outward Remittances under LRS (US$ Million)

Others Studies Abroad
Medical Treatment Maintenance of close relatives
Travels Donations
Gift Investment in equity/debt
20000

13,788 13,911
11,334

10000 8,171
4,643

1,164 1,002 1,206 1,094 1,326
0

Source: Reserve Bank of India

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