TDS on 'Income' from Mutual Funds is mentioned in Section 194K. The question of whether capital gains from the sale of mutual funds should be subject to TDS under IRC 194K remained unclear. On February 2, 2020, the CBDT did, however, offer an official clarification. TDS must therefore be subtracted at a rate of 10% exclusively on dividend income. Additionally, it does not apply to capital gain income from the sale of mutual funds.