The MF industry will seek SEBI guidance on operational issues related to TDS in mutual funds, said two people aware of the development.
“AMFI, RTAs and fund houses will have a conference call to discuss TDS issue with SEBI on Monday February 10, 2019. The discussion will help the industry create uniformity in terms of dealing with TDS on dividend income,” said a senior official requesting anonymity.
This comes after the Budget 2020-21 proposal to deduct 10% TDS on dividend payment exceeding Rs 5000. NRIs will have a 20% TDS.
Post this proposal, multiple operational issues have cropped up and need to be clarified. For instance, the industry will discuss TDS rate applicable on folios that do not have PAN. The source said that one of the proposals up for discussion is to levy 20% TDS on folios without PAN.
While investors having folios without PAN are not allowed to redeem their investment, they are eligible to get dividend income, the source said.
