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.

 

 


Harish Krishnan Cement is likely to benefit from consolidation in the sector, government spending and demand revival, said Harish Krishnan of Kotak Mutual Fund.
Thu, 29 Jun 2017 16:26:04 +0530


Corrections will always be good, lead to long-term investing: AMFI Chairman In an interview to CNBC-TV18, A Balasubramanain, Chairman at AMFI shared his readings and outlook on the market fundamentals. He also spoke about the AMFI Mutual Fund Summit.
Tue, 27 Jun 2017 17:02:42 +0530


Earnings to be key driver for market; bullish on some financial services: DSP BlackRock Anup Maheshwari of DSP BlackRock feels valuations are stretched, but earnings growth will help the market. He likes PSU banks as well as books will be in better shape in 12-18 months.
Mon, 19 Jun 2017 10:54:07 +0530


5 tips on managing investments in equity mutual funds in over-valued equity market With valuation reaching such historical highs, a 10–20% correction triggered by domestic or global geopolitical events cannot be ruled out.
Fri, 16 Jun 2017 10:39:39 +0530


5 tips on managing investments in equity mutual funds in over-valued equity market With valuation reaching such historical highs, a 10–20% correction triggered by domestic or global geopolitical events cannot be ruled out.
Fri, 16 Jun 2017 10:39:39 +0530


5 tips on managing investments in equity mutual funds in over-valued equity market With valuation reaching such historical highs, a 10–20% correction triggered by domestic or global geopolitical events cannot be ruled out.
Fri, 16 Jun 2017 10:39:39 +0530


5 tips on managing investments in equity mutual funds in over-valued equity market With valuation reaching such historical highs, a 10–20% correction triggered by domestic or global geopolitical events cannot be ruled out.
Fri, 16 Jun 2017 10:39:39 +0530


5 tips on managing investments in equity mutual funds in over-valued equity market With valuation reaching such historical highs, a 10–20% correction triggered by domestic or global geopolitical events cannot be ruled out.
Fri, 16 Jun 2017 10:39:39 +0530


Kotak#39;s Harsha Upadhyaya says its time to tread with caution; bets on rural recovery Harsha Upadhyaya of Kotak Mutual Fund believes that the pace of earnings recovery against inflows are slower. He likes consumer discretionary space and cements, and sees downside for IT.
Tue, 13 Jun 2017 11:37:17 +0530


Dr.Renu Pothen The trend of older or conservative investors moving their life savings into balanced funds essentially means that they are convinced these funds can give them regular dividends that can beat fixed deposits by a good margin over the medium to long term.
Thu, 08 Jun 2017 14:31:58 +0530


RBI may not change their stance but expect them to be less hawkish this time: SBI MF The 7th of every month is Mutual Fund Day here at the CNBC-TV18 stable. In an interview to CNBC-TV18, Navneet Munot, CIO of SBI MF shared his views and outlook on financial health as well as his expectations from Reserve Bank of India (RBI) policy.
Wed, 07 Jun 2017 14:26:00 +0530


See midcaps correcting; like retail banks, auto: Motilal Oswal MF#39;s Gautam Sinha Roy In the near term, the government will try to keep the impact of GST least disruptive as possible
Wed, 31 May 2017 13:04:45 +0530


Anil Rego The most important principle in lump-sum investing, especially in equity funds, is to maintain your calm and equanimity.
Tue, 30 May 2017 12:29:49 +0530


Amar Pandit Mutual fund is a professionally-managed investment scheme, run by an asset management company (AMC) that pools together a group of people and invests their money in instruments/assets for a common investment objective. As compared to PMS, MFs have a wider range of investment options, that an investor can invest in based on his risk profile.
Fri, 26 May 2017 11:41:42 +0530


Joydeep Sen Bank deposits and fixed income mutual funds differ with each other on a key parameter.
Fri, 19 May 2017 09:56:58 +0530

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