Taxation

TAX RECKONER 2015-16

 Mutual Fund Taxation for Individuals/HUFs

Equity Mutual Funds – Units of equity mutual funds held for more than 12 months qualify as long-term capital asset and long term capital gains (LTCG) on equity mutual funds are tax-free or exempt from tax, while short term capital gains on equity mutual funds are taxed at 15%.

Non-Equity Mutual Funds – Units of non-equity mutual funds held for more than 36 months qualify as long-term capital asset and long term capital gains (LTCG) on non-equity mutual funds are taxed at 20% with indexation, while short term capital gains on non-equity mutual funds are taxed as per the slab rate of the individual/HUF investor.

Dividend Income – Dividend income is tax-free or exempt from tax in the hands of individual/HUF investors. Dividend Distribution Tax (DDT), which is applicable to non-equity schemes only, is paid by the mutual fund/asset management company.

Some Important Points:

  1. Surcharge at the rate of 12% will be applicable to Individuals/HUFs having total income exceeding Rs. 1 crore.
  1. Surcharge at the rate of 12% will be applicable to the domestic companies where the income exceeds Rs. 10 crore. Where income exceeds Rs. 1 crore but is less than Rs. 10 crore, surcharge of 7% will be applicable.
  1. In order to qualify as long-term capital asset, the units of mutual funds (other than units of equity oriented funds) should be held for a period of more than 36 months. In the case of equity oriented funds, the units would qualify as long-term capital assets if held for more than 12 months.
  1. In cases where the taxable income, reduced by the taxable long term capital gains of a resident individual/HUF is below the basic exemption limit, the long term capital gain will be reduced to the extent of this shortfall and only the balance of the long term capital gain is chargeable to income tax. The benefits of this provision are not available to NRIs.
  1. For the purposes of determining the dividend distribution tax payable, the amount of distributed income shall be increased to such amount as would, after reduction of the dividend distribution tax on such increased amount at the specified tax rates, be equal to the amount of income distributed by the Mutual Fund.
  1. Rebate of up to Rs. 2,000 available for resident individuals whose total income does not exceed Rs. 500,000.
  1. (i) In the case of a resident individual of the age of 60 years or more but less than 80 years, the basic exemption limit is Rs. 300,000.

(ii) In the case of a resident individual of the age of 80 years or more, the basic exemption limit is Rs. 500,000.

(iii) Education cess is applicable at the rate of 2% on income-tax and secondary and higher education cess at the rate of 1% on income-tax.

Note: The rates above are based on the proposals in the Finance Bill, 2015. They will become a law once passed by both the Houses of Parliament and when they receive the assent of the President.

 

 


Adhil Shetty Your SIP investment must go up as your income rises.
Fri, 13 Oct 2017 12:14:33 +0530


Here#39;s a fundamental view on the market from Pankaj Tibrewal Watch the interview of Pankaj Tibrewal, Sr. VP Equity Fund Manager at Kotak Mutual Fund with CNBC-TV18#39;s Prashant Nair and Ekta Batra where he shared his readings and outlook on market fundamentals as well as specific stocks and sectors.
Mon, 09 Oct 2017 12:15:02 +0530


Reliance MF#39;s Gunwani says SEBI move on MFs good; positive on logistics, pharma Manish Gunwani sees good earnings, both domestic and global in FY19 and sectors such as telecom and pharma could see year on year growth.
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Nilesh Shah In a move to declutter and rationalise mutual funds, Securities and Exchange Board of India (SEBI) sets 5 broad categories for mutual fund (MF) schemes. Also defines largecap, midcap and smallcap companies by market capitalisation. In an interview to CNBC-TV18, Nilesh Shah, Managing Director, Kotak Mahindra AMC shared his views and outlook on the same.
Mon, 09 Oct 2017 10:35:32 +0530


Juzer Gabajiwala These funds invest in highly liquid government instruments. You can invest even for a day and get your funds back the next business day
Thu, 28 Sep 2017 11:23:57 +0530


Jitendra P.S.Solanki Total return index captures dividends and show true picture of fund manager’s performance.
Wed, 27 Sep 2017 09:22:11 +0530


Nilesh Shah There seems to be lot of money waiting on the sidelines but when the correction comes and there is negativity around, they may like to time it better, said Nilesh Shah, Managing Director, Kotak Mahindra AMC.
Tue, 26 Sep 2017 12:29:22 +0530


Here#39;s a fundamental check on markets by UTI MF#39;s Swati Kulkarni Watch the interview of Swati Kulkarni of UTI MF with Prashant Nair and Ekta Batra of CNBC-TV18. She shared her reading and outlook on the market.
Mon, 25 Sep 2017 14:06:05 +0530


Mahesh Patil Mahesh Patil of Birla Sun Life believes that the Street currently could be reacting to cues such as higher current account deficit (CAD), pressure on the rupee and developments around fiscal deficit as well.
Fri, 22 Sep 2017 10:31:54 +0530


Here is a fundamental view on the market from Sunil Subramaniam Watch the interview of Sunil Subramaniam, CEO at Sundaram Mutual Fund with Prashant Nair and Ekta Batra on CNBC-TV18, in which he shared his readings and outlook on market and specific stocks.
Tue, 19 Sep 2017 12:25:49 +0530


Shweta Jain SIP work irrespective of market sentiment. Marry the SIP with your financial goal and you are home.
Tue, 19 Sep 2017 09:50:25 +0530


Sunil Singhania Says economy will continue to grow and that will drive up the equity markets going forward.
Mon, 18 Sep 2017 10:16:49 +0530


Rajeev Thakkar Among the new theme that they have added is Facebook, which is an international stock, said Rajeev Thakkar, Chief Investment Officer and Director, PPFAS MF.
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Joydeep Sen Only a fund with a relatively smaller corpus size can be quickly repositioned; a large fund will have the baggage of existing portfolio which should not be disturbed.
Thu, 14 Sep 2017 09:53:45 +0530


Vaibhav Agrawal Unlike other instruments like PPF, NSC and Long term deposits, an ELSS is a long-term wealth creator due to its consistent equity exposure.
Tue, 12 Sep 2017 11:26:33 +0530

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