Download The rates are applicable for the financial year 2017

The rates are applicable for the financial year 2017-18
Tax Implications on Dividend received by Unit holders from a Mutual Fund
Dividends received in respect of units of a mutual fund specified under section 10(23D) of the
Income-tax Act, 1961(‘the Act’) will be exempt from income-tax in the hands of the unit holders
under section 10(35) of the Act.
Resident
Individual/
HUF
Domestic
Company
Nonresident
Indian
(NRI)
Receipt of dividend
All Schemes
Nil
Nil
Nil
Rates of Dividend Distribution Tax payable by the scheme2
Equity Oriented
Nil
Nil
Nil
schemes
Infrastructure
25% + 12%
30% + 12%
5% + 12%
Debt Fund
Surcharge + Surcharge + Surcharge +
Scheme (‘IDFS’)
3% Cess
3% Cess
3% Cess
Other than
equity oriented
schemes and
IDFS
(i.e. money
market mutual
fund, liquid
fund, etc.)
Foreign
Portfolio
Investor
(FPI)1
Foreign
Company
Nil
Nil
Nil
Nil
5% + 12%
Surcharge +
3% Cess
5% + 12%
Surcharge +
3% Cess
=28.84%
25% + 12%
Surcharge +
3% Cess
= 34.61%
30% + 12%
Surcharge +
3% Cess
= 5.77%
25% + 12%
Surcharge +
3% Cess
= 5.77%
30% + 12%
Surcharge +
3% Cess
= 5.77%
30% + 12%
Surcharge +
3% Cess
=28.84%
= 34.61%
= 28.84%
= 34.61%
= 34.61%
NRI 3
FPI
Foreign
Company3
Nil
Nil
Nil
I. Capital Gains Taxation
Resident
Domestic
Individual/
Company
HUF
Long Term Capital Gains (LTCG)
Equity Oriented
Schemes4
(units held for
more than 12
months)
Other than
equity oriented
schemes
(units held for
more than 36
months)
Listed
Nil
Nil
The rates for listed as well as unlisted non-equity oriented schemes are
provided below
20% with
indexation +
20% with
indexation +
20% with
indexation +
10% without
indexation +
20% with
indexation +
surcharge as
applicable5+
3% Cess
surcharge
as
applicable5
+ 3% Cess
Unlisted
20% with
20% with
10% without
indexation + indexation +
indexation
surcharge as surcharge as and foreign
applicable5
applicable6 +
currency
+ 3% Cess
3% Cess
fluctuation
benefits +
surcharge
as
applicable5 +
3% Cess
Short Term Capital Gains (STCG)
Equity Oriented
15%+
15% +
15% +
Schemes4
surcharge as surcharge as
surcharge
(units held for
applicable5 + applicable6 +
as
12 months or
3% Cess
3%
applicable5 +
less)
Cess
3% Cess
Other than
equity oriented
schemes
(units held for
36 months or
less)
30%9 +
surcharge as
applicable5 +
3% Cess
surcharge as
applicable6 +
3% Cess
25%10/30%+
30%9+
surcharge as
surcharge
applicable6 +
as
3%Cess
applicable5 +
3% Cess
surcharge as
applicable7 +
3% Cess
surcharge as
applicable8
+ 3% Cess
10% without
indexation
and foreign
currency
fluctuation
benefits +
surcharge as
applicable7 +
3% cess
10% without
indexation and
foreign
currency
fluctuation
benefits +
surcharge as
applicable8 +
3% cess
15% +
surcharge as
applicable7
+ 3% Cess
15% +
surcharge as
applicable8 +
3%
Cess
30%+
surcharge as
applicable7 +
3% cess
40% +
surcharge as
applicable8 +
3% cess
1
- Erstwhile known as Foreign Institutional Investors (FIIs). Also, erstwhile FIIs and Qualified
Foreign Investors (QFIs) are now deemed to be FPIs.
2
- For the purpose of determining the tax payable, the amount of distributed income shall 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. The impact of the same has not been reflected in
the table.
3
- Short term/ long term capital gain tax will be deducted at the time of redemption of units in
case of non-residents (other than FPIs).
4
- Securities transaction tax (STT) will be deducted on equity oriented scheme at the time of
redemption/ switch to the other schemes/ sale of units. Mutual fund would also pay STT
wherever applicable on the securities sold.
5
- Surcharge at the rate of 15% of the tax amount is levied in case of individuals/HUFs where
taxable income of the individuals/HUFs exceeds Rs 1 crore. Surcharge at 10% of the tax
amount would be levied in case of individuals/HUFs where their total income exceeds Rs 50
lakhs but does not exceed Rs 1 crore.
6
- Surcharge at the rate of 7% of the tax amount is levied for domestic corporate unit holders
where the income exceeds Rs 1 crore but less is than Rs 10 crores and at the rate of 12% of
the tax amount where income exceeds Rs 10 crores.
7
- The rate of surcharge would depend on the legal status of the FPI
 If FPI is an individual / trust- surcharge @ 10% of the tax amount would be applicable if
taxable income exceeds Rs 50 lakhs but does not exceed Rs 1 crore; surcharge @ 15%
of the tax amount would be applicable if taxable income exceeds Rs 1 crore
 If FPI is a firm - surcharge @ 12% of the tax amount would be applicable if taxable
income exceeds Rs 1 crore
 If FPI is a company- surcharge @ 2% of the tax amount would be applicable if taxable
income exceeds Rs 1 crore but does not exceed Rs 10 crores; surcharge @ 5% of the
tax amount would be applicable if taxable income exceeds Rs 10 crores
8
- Surcharge at the rate of 2% of the tax amount is levied for foreign corporate unit holders
where the income exceeds Rs 1 crore but is less than Rs 10 crores and at the rate of 5% of the
tax amount where income exceeds Rs 10 crores.
9
- Assuming the investor falls into highest tax bracket.
10
- If total turnover or gross receipts during the financial year 2015-16 does not exceed
Rs 50 crores.
Notes:
1. Education Cess at the rate 3% applies across all taxpayers (on amount of tax plus
applicable surcharge).
2. Any transfer by a unit holder of a capital asset, being unit or units, held by him in the
consolidating plan of a mutual fund scheme, made in consideration of the allotment to him of
a capital asset, being a unit or units, in the consolidated plan of that scheme of the mutual
fund shall not be considered transfer for capital gain tax purposes and thereby shall not be
chargeable to tax. In this regard, the cost of acquisition of the units in the consolidated plan
of mutual fund scheme shall be the cost of units in consolidating plan of mutual fund scheme
and period of holding of the units of consolidated plan of mutual fund scheme shall include
the period for which the units in consolidating plan of mutual fund scheme were held by the
unit holder.
3. All non-resident investors such as FPIs, NRIs, etc. are also eligible for claiming benefits
under a Double Tax Avoidance Agreement / Treaty (DTAA) entered into by India with the
country of which the concerned investor is a tax resident. As per circular no. 728 dated
October 1995 by CBDT, in the case of a remittance to a country with which a DTAA is in
force, the tax should be deducted at the rate provided in the Finance Act of the relevant year
or at the rate provided in DTAA whichever is more beneficial to the assessee. As per the
Finance Act 2013, in order to claim the benefits under the DTAA, the taxpayer would have to
provide a “certificate of his being resident” (commonly known as Tax Residency Certificate)
from the government of the country in which he is a resident. In addition to the said
certificate, the concerned non-resident is also required to provide certain information in
Form 10F such as status, nationality, Tax Identification Number, period for which the
assessee is a resident in the concerned country, address and a declaration that the
certificate of him being a resident is obtained. If any information in Form 10F is already
provided on the certificate of residency, the same need not be provided again the form.
II. Securities Transaction Tax
STT is levied on the value of taxable securities transactions as under.
Taxable Securities Transaction
Purchase/ Sale of Equity Shares on recognised stock
exchange (delivery based)
Purchase of an unit of an equity oriented fund, where –The
transaction of such purchase is entered into in a recognised
stock exchange; and The contract for the purchase of such
share is settled by the actual delivery or transfer of such share.
Sale of an unit of an equity oriented fund, where –
The transaction of such sale is entered into in a recognised
stock exchange; and
The contract for the sale of such share is settled by the actual
delivery or transfer of such share.
Sale of an equity share in a company or a unit of equity
oriented fund, where –
The transaction of such sale is entered into in a recognised
stock exchange; and
The contract for the sale of such share is settled otherwise
than by the actual delivery or transfer
Sale of unit of an equity oriented fund to the Mutual Fund itself
Rate
0.1%
Payable By
Purchaser/
Seller
NIL
Purchaser
0.001%
Seller
0.025%
Seller
0.001%
0.05%
Seller
Sale of an option in securities
In case of sale of option in securities, where option is
exercised
Sale of a futures in securities
Seller
0.125%
Purchaser
0.01%
Seller
III. Tax Deduction At Source from Capital Gains:
Transaction
Short Term Capital Gains
Sale transactions of equity
15%
shares and unit of an equity
oriented fund both of which
attract STT
Sale transaction in case of other than Equity oriented funds
Foreign companies (listed schemes)
40%
Foreign companies (unlisted
40%
schemes)
FIIs and FPIs
NIL
Overseas Financial Organisation
30%
NRIs (listed schemes)
30%
NRIs (unlisted schemes)
30%
Any other non-residents
30%
(listed schemes)
Any other non-residents
30%
(unlisted schemes)
Long Term Capital Gains
Nil
20%
10%
NIL
10%
20%
10%
20%
10%
(Above rates have to be increased with applicable surcharge and education cess to arrive at the
effective rates)
Where the unit holder, resident or non-resident, does not furnish its Permanent Account Number
(PAN) to the mutual fund, then tax will be withheld at the rate of 20% even if the DTAA or the
Act provide for a lower rate. However, with effect from 1 June 2016, this higher withholding tax
rate of 20% may not apply for non-residents if the following details prescribed under Rule 37BC
of the Income Tax Rules, 1962 are furnished by the recipient non-resident to the payer;
 name, e-mail id, contact number;
 address in the country or specified territory outside India of home country of the nonresident;
 Tax Residency Certificate (TRC);
 Tax Identification Number of the non-resident in the country or specified territory of his
residence.
IV.Notes
Equity Oriented Fund
JM Balanced Fund
JM Arbitrage Advantage Fund
JM Basic Fund
JM Core 11 Fund
JM Equity Fund
JM Tax Gain Fund
JM Multi Strategy Fund
Other than equity oriented Fund:
JM Floater Long Term Fund
JM G-Sec Fund
JM High Liquidity Fund
JM Short Term Fund
JM Money Manager Fund
JM Income Fund
Listed Schemes: None
Unlisted Schemes: All Equity and other than equity oriented schemes mentioned above
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME
RELATED DOCUMENTS CAREFULLY.
Disclaimer: The information set out in the Tax Reckoner 2017-18 (‘the document’) is for
general purposes only and is not an offer to sell or a solicitation to buy/sell any units of schemes
of mutual fund. The information set out is neither a complete disclosure of every material fact of
the Income-tax Act, 1961 nor does it constitute tax or legal advice. Investors should be aware
that the fiscal rules/ tax laws may change and there can be no guarantee that the current tax
position may continue indefinitely. In view of the individual nature of the tax consequences, each
investor is advised to consult his/ her own professional tax advisor. The information/ data herein
alone is not sufficient and shouldn’t be used for the development or implementation of an
investment strategy and should not be construed as investment advice. Investors alone shall be
fully responsible / liable for any decision taken on the basis of this document.
Neither JM Financial Mutual Fund nor JM Financial Asset Management Limited nor any person
connected with it accepts any liability arising from the use of this information. The investors
should before investing in the Scheme(s) of JM Financial Mutual Fund make his/their own
investigation and seek appropriate professional advice.