Section 115UB of the 1961 Act → Section 224 of the 2025 Act
Tax on income of investment funds and their unit holders.
Quick answer
Section 115UB of the Income-tax Act, 1961 corresponds to Section 224 of the Income-tax Act, 2025. Relationship: Revised. Correspondence verified against both Acts.
How it works
The fund is a conduit. Its income (other than business income) is taxed in the investors’ hands, keeping its character.
Example
A Category II fund earns ₹5 lakh of long-term gains for you: you are taxed at 12.5% plus cess; the fund deducts 10% first.
What you need to do
Investor: report your share from Form No. 78 and pay any balance. Fund: deduct tax, file Form No. 79, send Form No. 78.
What changed?
- It uses the new Act’s term “tax year” in place of “previous year”.
- It opens with “Irrespective of anything…” in place of “Notwithstanding anything…”.
- Read the complete new provision, including its conditions, exceptions and related provisions, when applying it.
The two texts, side by side
1961 · Section 115UB115UB. (1) Notwithstanding anything contained in any other provisions of this Act and subject to the provisions of this Chapter, any income accruing or arising to, or received by, a person, being a unit holder of an investment fund, out of investments made in the investment fund, shall be chargeable to income-tax in the same manner as if it were the income accruing or arising to, or received by, such person had the investments made by the investment fund been made directly by him. (2) Where in any previous year, the net result of computation of total income of the investment fund [without giving effect to the provisions of clause …
2025 · Section 224224. (1) Irrespective of anything contained in any other provision of this Act and subject to the provisions of this section, where a person, being a unit holder of an investment fund, out of investments made in the investment fund, receives any income or any income accrues or arises to him, such income shall be chargeable to income-tax in the same manner as if, it were the income accruing or arising to, or received by, such person, had the investments made by the investment fund been made directly by him. (2) Where in any tax year, the net result of computation of total income of the investment fund, without giving effect to the provisions …
Excerpts end with … where the provision continues. Last reviewed 24 October 2026.
Related pages
Meet the expert
CS Prashant Kumar
Company Secretary & Compliance Officer
Global Horizons Capital Advisors (IFSC) Private Limited — an IFSCA-licensed investment banker
Published in The Chartered Accountant (Jun 2025, Jan 2025, Mar 2024) and Chartered Secretary (Aug 2023)
Prashant Kumar is a seasoned Company Secretary and corporate governance strategist with more than 13 years of experience advising large corporates, promoter-led groups and global businesses on compliance, regulatory risk and board governance. In GIFT IFSC, the IFSCA regime is his day job rather than a research topic.