chargeable at the rate of 10%. Such gains will be calculated without indexation of cost of acquisition. Nosurcharge is applicable for taxes under section 115AB, in respect of corporates.
What are the tax benefits for foreign investors?Section 115E:
Under Section 115E of the Act, capital gains chargeable on transfer of long-term capitalassets of an Non-Resident Indians (NRIs) are subject to following rates of tax:
Investment income: --- 20%
Long term capital gains: --- 10%
Under provisions of Section 10(23D) of the Act, any income received by the Mutual Fundis exempt from tax.
Under Section 115R, the Income distributed to a unit holder of a Mutual Fund shall becharged to following rates of tax to be payable by the Mutual Fund.
Amounts distributed to individual or HUF: 12.5%
Amounts distributed to others: 20.0%However, the above distribution tax will be exempted for open-ended Equity-Oriented Funds (funds investingmore than 50% in equity or equity related instruments).
Are there any other tax benefits related to mutual funds?
Under Section 88, contributions made from taxable income in the specified investments qualifies for a taxrebate of 20% where gross total income is up to Rs 150,000 and 15% of the invested amount where grosstotal income is between Rs 150,000 and Rs 500,000, subject to a maximum aggregated ceiling of Rs70,000.For investment in infrastructure bonds and/or equity-linked saving schemes (ELSS) (not exceeding Rs10,000/- under clause (23D) of Section 10), or eligible issue of equity shares or debentures the maximumqualifying investment limit for tax rebate is Rs 100,000. However, such tax rebate is not available in respectof tax on long-term capital gains as per Section 112 and short-term capital gains as per Section 111A of theAct.
Is there any wealth tax applicable to mutual fund investments?
No. Units held under the Scheme of the Fund are not treated as assets within the meaning of Section 2(EA)of the Wealth Tax Act, 1957 and are, therefore, not liable to Wealth Tax.
Is there any gift tax applicable to mutual funds investments?
No. Units of the mutual fund may be given as a gift and no gift tax will be payable either by the donor or thedonee; since mutual funds do not fall within the purview of the Gift Tax Act.