TDS Section 194K of Income-tax Act, 1961: TDS on Mutual Fund
Written by Ashish Suryakant Pawar
20 Jul 2026 • 7 minutes read
Section 194K of the Income-tax Act, 1961 outlines the rules regarding TDS on any income in respect of units of a mutual fund. It allows fund houses to deduct TDS at 10% if the annual amount of such income is more than ₹10,000 for resident investors.
The Indian government abolished the Dividend Distribution Tax or DDT on mutual fund dividends back in 2020. But did this mean you could now receive MF income without taxes? Not really.
As per Section 194K of the Income-tax Act, 1961, fund houses now have to deduct TDS on the amount of such income before distributing it to investors. In this article, we discuss the meaning of TDS under Section 194K of the Income-tax Act, 1961, when the deductions happen, and what you should remember about TDS on MF.
Table of Content
What is Section 194K of the Income-tax Act, 1961?
What is the TDS Rate Under Section 194K of the Income-tax Act, 1961?
Where is TDS Applicable: Understanding Types of Income from Mutual Funds
How Does TDS Deduction Under Section 194K Work in Practice?
Exceptions Under Section 194K of the Income-tax Act, 1961
Things to Remember for TDS on Mutual Funds
Conclusion
TDS Section 194K of the Income-tax Act, 1961 FAQs
*Mutual Fund Investments are subject to market risks, please read all scheme related documents carefully.
Author Bio
Ashish Suryakant Pawar
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