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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.