The 60-second version
Section 194LBC requires 25% TDS on income distributed by a securitisation trust to resident investors — higher rate than InvIT/REIT 10% lanes.
194LBC is 25% — much higher than InvIT 10% lane
Section 194LBC applies when a securitisation trust pays income to a resident investor — trust deducts 25% TDS on the distribution.
Securitisation trusts pool receivables (mortgage, auto, MSME) — distinct from InvIT infrastructure and REIT real estate pass-through.
InvIT comparison: Section 194LB guide at 10% for infrastructure trust distributions.
Trust TDS rate comparison
| Section | Rate | Trust type |
|---|---|---|
| 194LBC | 25% | Securitisation trust |
| 194LB | 10% | InvIT distribution |
| 194LBA | 10% | REIT distribution |
| 194LBB | 10% | SPV interest to trust |
194LBC sequence
Distribution
Trust declares investor payout.
25% TDS
Trust deducts under 194LBC.
26AS
Verify trust TAN credit.
ITR
Declare pass-through income.
Refund check
Claim excess TDS if slab lower.
Flow
194LBC kit
- Trust stmt.
- TDS cert.
- 26AS.
- PAN.
- ITR ACK.
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High TDS
25% TDS often exceeds slab tax — file ITR to claim refund even if no other income.
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vs 194LB?
194LBC securitisation trust at 25%; 194LB InvIT at 10%.
NRI investor?
Higher NRI rate before return — redesignate KYC to resident.
Capital gains on units?
Separate schedule — not part of 194LBC distribution.
RNOR?
Indian securitisation trust income taxed from resident date.
Form 15G?
Unlikely at 25% TDS — still file ITR for refund.
AIS mismatch?
Reconcile trust stmt with AIS TDS entry.
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.