The 60-second version
Section 194K requires AMC to deduct 10% TDS on mutual fund income paid to resident unit-holders — distinct from Section 196A 20% NRI non-resident lane.
194K is resident AMC TDS — not the NRI 196A lane
Section 194K applies when a mutual fund pays income to a resident unit-holder — AMC deducts 10% TDS on dividends and certain redemption proceeds.
Before return you may have seen Section 196A at 20% or 30% as NRI — after redesignation to resident, AMC switches to 194K.
NRI lane reference: Section 196A guide.
MF TDS matrix
| Section | Rate | Holder status |
|---|---|---|
| 194K | 10% | Resident unit-holder |
| 196A | 20%/30% | NRI non-resident |
| 194K + capital gains | 10% on income portion | Equity MF dividend |
| 112A / 111A | LTCG/STCG tax | Separate from TDS on income |
194K sequence
KYC redesignation
AMC folio marked resident.
Redemption
AMC processes payout.
10% TDS
Deducted on income component.
26AS
Verify AMC TAN credit.
ITR
Declare capital gains separately.
Flow
194K kit
- Folio stmt.
- Capital gains stmt.
- 26AS.
- PAN.
- ITR ACK.
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No PAN
20% TDS per Section 206AA if PAN not linked on folio.
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vs 196A?
196A NRI non-resident; 194K resident after return.
ELSS lock-in?
TDS on dividend during lock-in; LTCG on redemption after 3y.
SIP folio?
Same 194K once folio is resident.
Form 15G?
If total income below exemption before MF credit.
Debt MF?
194K on income; LTCG taxed under Section 112.
AIS mismatch?
Reconcile AMC stmt with AIS TDS entry.
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