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Tax Reckoner 2016-17

Tax Rates Specific to Mutual Funds

Tax Implications on Dividend received by Unit holders

 

Individual HUF

Domestic Company

NRI

Dividend

Equity oriented Schemes

Nil

Nil

Nil

Debt oriented Schemes

Nil

Nil

Nil

Tax on Distributed income (payable by the scheme) rates **

Equity oriented Schemes*

Nil

Nil

Nil

Money Market and Liquid schemes

25% + 12% Surcharge** + 3% Cess=28.84 %

30% + 12% Surcharge + 3% Cess=34.608 %

25% + 12% Surcharge** + 3% Cess=28.84 %

Debt schemes (other than infrastructure debt fund)

25% + 12% Surcharge** + 3% Cess=28.84 %

30% + 12% Surcharge + 3% Cess=34.608 %

25% + 12% Surcharge** + 3% Cess=28.84 %

Infrastructure Debt Fund

25% + 12% Surcharge** + 3% Cess=28.84 %

30% + 12% Surcharge + 3% Cess=34.608 %

5% + 12% Surcharge** + 3% Cess=5.768 %

** Security transaction tax (STT) will be deducted on equity funds at the time of redemption / switch to the other schemes / sale of units.

**** For the purpose of determining the tax payable by the scheme, the amount of distributed income has to be increased to such amount as would, after reduction of tax on such increased amount, be equal to the income distributed by the Mutual Fund. In other words, the amount payable to unit holders is to be grossed up for determining the tax payable and accordingly, the effective tax rate would be higher.

Capital Gain Taxation

 

Individual / HUF $

Domestic Company @

NRI $ / #

Long Term Capital Gains (units of equity oriented mutual fund schemes held for more than 12 months and 36 months in case of other units)

Equity oriented Schemes

Nil

Nil

Nil

Other than equity oriented Schemes

20% with indexation

20% with indexation

Listed - 20% with indexation
Unlisted - 10% without indexation

Short Term Capital Gains (units of equity oriented mutual fund schemes held for less than or equal to 12 months and 36 months in case of other units)

Equity oriented Schemes

15%

15%

10%

Other than equity oriented Schemes

30% ^

30%

30% ^

Tax Deducted at Source (Applicable only to NRI Investors)

Short term capital gains Long term capital gains
Equity oriented Schemes 15% Nil
Other than equity oriented Schemes 30% ^ Listed - 20% with indexation
Unlisted - 10% without indexation
 

$ - Surcharge at the rate of 15% is levied in case of individual/ HUF unit holders where their income exceeds Rs 1 crore.

@ - Surcharge at the rate of 7% is levied for domestic corporate unit holders where the income exceeds Rs 1 crore but less than 10 crores and at the rate of 12%, where income exceeds 10 crores.

# - Short term/ long term capital gain tax will be deducted at the time of redemption/switches of units in case of NRI investors only.

^ - Assuming the investor falls into highest tax bracket.

Education Cess at the rate 3% will continue to apply on tax plus surcharge


Dividend Stripping: The loss due to sale of units in the schemes (where dividend is tax free) will not be available for set off to the extent of the tax free dividend declared; if units are:(A) bought within three months prior to the record date fixed for dividend declaration; and (B) sold within nine months after the record date fixed for dividend declaration


Bonus Stripping: The loss due to sale of original units in the schemes, where bonus units are issued, will not be available for set off; if original units are: (A) bought within three months prior to the record date fixed for allotment of bonus units; and (B) sold within nine months after the record date fixed for allotment of bonus units. However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

 
Disclaimer:
"The information set out above is included for general information purposes only and does not constitute legal or tax advice. In view of the individual nature of the tax consequences, each investor is advised to consult his or her own tax consultant with respect to specific tax implications arising out of their participation in the Scheme. Income Tax benefits to the mutual fund & to the unit holder is in accordance with the prevailing tax laws as certified by the mutual funds tax consultant. Any action taken by you on the basis of the information contained herein is your responsibility alone. We will not be liable in any manner for the consequences of such action taken by you. The information contained herein is not intended as an offer or solicitation for the purchase and sales of any schemes of any Mutual Fund."
 
 
 
 
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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

 
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