Financial Year 2013-14: Capital Gains Tax On MF Investment..!

Capital Gains Taxation- Long Term Capital Gains (units held for more than 12 months)x on distributed income (payable by the scheme) rates

Long Term Capital Gains (units held for more than 12 months)

Details	Individual/ HUF $	Domestic Company @	NRI $ / #
Equity oriented schemes	Nil	Nil	Nil
Other than equity oriented schemes	10% without indexation or 20% with indexation whichever is lower	10 without indexation or 20% with indexation whichever is lower	10 without indexation or 20% with indexation whichever is lower
Without indexation	10%	10%	10%
With indexation	20%	20%	20%

Short Term Capital Gains (units held for 12 months or less)

Equity oriented schemes	15%	15%	15%
Other than equity oriented schemes	30%^	30%^	30%

                                                                                                                                                       

Tax Deducted at Source (Applicable only to NRI Investors)

Details	Short term capital gains	Long term capital gains
Equity oriented schemes	15%	Nil
Other than equity oriented schemes	30%	20%##

                                                                                                                                                    

$ - Surcharge at the rate of 10 % is proposed to be levied in case of individual / or HUF unit holders where their income exceeds Rs. 1 crore.

at - Surcharge at the rate of at 5% is proposed to be levied for domestic corporate unit holders where the income exceeds Rs. 1 crore but less than Rs. 10 crores and at the rate of 10 %,

where income exceeds Rs. 10 crores.

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

## - After providing for indexation

^ Assuming the investor falls into highest tax bracket.

Education Cess at 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 setoff to the extent of the tax free dividend declared; if units are:

(A) bought within 3 months prior to the record date fixed for dividend declaration; and (B) sold within 9 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 3 months prior to the record date fixed for allotment of bonus units; and

(B) sold within 9 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.

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