Tax Reckoner 2020-21
Snapshot of Tax rates specific to Mutual Funds
The rates are applicable for the financial year 2020-21 as perthe Finance Act,2020
Income-tax implications on income in respect of units of Mutual Fund
Type of Investor
Withholding tax rate
Resident
10%*
NRI
20%**
The Finance Act, 2020 abolished income distribution tax and instead introduced taxing of income from mutual fund units in the hands of the unit holders.
* Tax not deductible if dividend income in respect of units of a mutual fund is below Rs. 5,000 in a financial year.
** The base tax is to be further increased by surcharge at the rate of:
• 37% on base tax where total income exceeds Rs. 5 crore;
• 25% where total income exceeds Rs. 2 crore but does not exceed Rs. 5 crore;
• 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crore; and
• 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore
Further, “Health and Education Cess”is to be levied at 4% on aggregate of base tax and surcharge.
Capital Gains Taxation
Individual/ HUF$
Domestic Company@
NRI$
Equity Oriented Schemes
Long Term Capital Gains (units held for more than 12 months)
Short Term Capital Gains (units held for 12 months or less)
Long term capital gains
10%*
10%*
10%*
Short term capital gains
15%
15%
15%
Other Than Equity Oriented Schemes
Long Term Capital Gains (units held for more than 36 months)
Short Term Capital Gains (units held for 36 months or less)
Long term capital gains
20%
&
20%
&
Listed - 20%
&
Unlisted - 10%**
Short term capital gains
30%
^
30%/25%
^^
/22%
^^^
/15%
^^^^
30%
^
Tax deductible at source (Applicable to NRI Investors)
#
Short term capital gains
$
Long term capital gains
$
Equity oriented schemes
15%
10%*
Other than equity oriented schemes
30%
^
10%** (for unlisted) & 20%
&
(for listed)
*
Income-tax at the rate of 10% (without indexation benefitand foreign exchange fluctuation) to be levied on long-term capital gains exceeding Rs. 1 lakhprovided
transfer of such units is subject to Securities Transaction Tax (‘STT’).
$
Surcharge to be levied at:
37% on base tax where specifiedincome exceeds Rs. 5 crore;
25% where specified income exceeds Rs. 2 crore but does not exceed Rs. 5 crore;
15%where total income exceeds Rs. 1 crorebut does not exceed Rs. 2 crore; and
10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore.
Specified income – Total income excluding income by way of dividend or income under the provisions of section 111A and 112A of the Income-tax Act, 1961
(‘the Act’). Further, Health and Education Cess to be levied at the rate of 4% on aggregate of base tax and surcharge.
@
Surcharge at 7% on base taxis applicablewhere total income of domestic corporate unit holders exceeds Rs 1 crore but does not exceed 10 crores and at
12% where total income exceeds 10 crores. However, surcharge at flat rate of 10 percent to be levied on base tax for the companies opting for lower rate
of tax of 22%/15%. Further,“Health and Education Cess” to be levied at the rate of 4% on aggregate of base tax and surcharge.
#
Short term/ long term capital gain tax (along with applicable Surcharge and Health and Education Cess) will be deducted at the time of redemption of units in
case of NRI investors.
&
After providing indexation.
**
Without indexation.
^
Assuming the investor falls into highest tax bracket.
^^
If total turnover or gross receipts inthe financial year 2018-19does not exceed Rs. 400crores.
^^^ This lower rate is optional and subject to fulfillment of certain conditions as provided in section 115BAA.
^^^^ This lower rate is optional for companies engaged in manufacturing business (set-up & registered on or after 1 October 2019) subject to fulfillment of certain
conditions as provided in section 115BAB.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
TM
Years
Of Wealth Creation