The 60-second version
Section 194LBB requires 10% TDS when SPV pays interest to a business trust (InvIT/REIT) — pass-through chain under Section 115UA with separate TDS at trust and unit-holder levels.
194LBB is SPV-to-trust — 194LB is trust-to-unit-holder
Section 194LBB applies when a special purpose vehicle pays interest to a business trust such as an InvIT or REIT — 10% TDS deducted by SPV.
Unit-holders then receive distribution taxed under Section 194LB (InvIT) or 194LBA (REIT) — two layers in the pass-through chain.
InvIT lane: Section 194LB guide for unit-holder distribution TDS.
Business trust TDS chain
| Section | Rate | Payer → Payee |
|---|---|---|
| 194LBB | 10% | SPV → Business trust |
| 194LB | 10% | InvIT → Resident unit-holder |
| 194LBA | 10% | REIT → Resident unit-holder |
| 115UA | Pass-through | Tax in unit-holder hands |
194LBB sequence
SPV interest
Project company pays trust.
10% TDS
SPV deducts under 194LBB.
Trust distribution
InvIT/REIT declares payout.
194LB/LBA
Trust TDS on unit-holder leg.
ITR
Declare pass-through components.
Flow
194LBB kit
- Trust annual stmt.
- SPV TDS cert.
- Distribution stmt.
- 26AS.
- ITR ACK.
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NRI folio
Redesignate demat KYC to resident before next distribution — else NRI TDS rate may apply on unit-holder leg.
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vs 194LB?
194LBB SPV-to-trust; 194LB trust-to-unit-holder.
See 194LBB on 26AS?
Usually trust TAN — unit-holder sees 194LB/LBA credit.
Capital gains on units?
Section 112A if listed — separate from distribution TDS.
RNOR?
Indian trust distribution taxed from resident date.
Form 15G?
If total income below exemption on unit-holder leg.
Foreign REIT?
Schedule FA — not 194LBB chain.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.