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Tax Plan
 
 
Tax rules for mutual fund investors* as per Finance Bill 2009
 
EQUITY ORIENTED SCHEMES
  Short Term
Capital Gains Tax 		Long Term
Capital Gains Tax 		Dividend Income Dividend
Distribution Tax 		TDS
2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09
Resident Individual / HUF 10% 15% Nil Nil Tax Free Tax Free Nil Nil Nil Nil
Partnership Firms / AOP / BOI 10% 15% Nil Nil Tax Free Tax Free Nil Nil Nil Nil
Domestic Companies 10% 15% Nil Nil Tax Free Tax Free Nil Nil Nil Nil
NRIs 10% 15% Nil Nil Tax Free Tax Free Nil Nil STCG-10% LTCG-Nil STCG-10% LTCG-Nil
 
OTHER SCHEMES
  Short Term Capital Gains Tax Long Term Capital Gains Tax Dividend Income Dividend Distribution Tax-Other than Liquid/ Money Market Schemes Dividend Distribution Tax -Liquid/ Money Market Schemes TDS
  2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09
Resident Individual/HUF As per slab As per slab 10% (20% with) indexation 10% (20% with) indexation Tax Free Tax Free 14.1625% (12.50% plus 10% surcharge plus 3% education cess) 14.1625% (12.50% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) Nil Nil
Partnership Firms/ APO/BOI As per slab 30% 10% (20% with) indexation 10% (20% with) indexation Tax Free Tax Free 22.66% (20% plus 10% surcharge plus 3% education cess) 22.66% (20% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) Nil Nil
Domestic Companies 30% 30% 10% (20% with) indexation 10% (20% with) indexation Tax Free Tax Free 22.66% (20% plus 10% surcharge plus 3% education cess) 22.66% (20% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) Nil Nil
NRIs As per slab As per slab 10% (20% with) indexation 10% (20% with) indexation Tax Free Tax Free 14.1625% (12.50% plus 10% surcharge plus 3% education cess) 14.1625% (12.50% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) 28.325% (25% plus 10% surcharge plus 3% education cess) Nil Nil
 
Surcharge for resident indians,domastic companies and NRIs:
 
. For individuals ,HUF,BOI and AOP, 10% surchargeon tax payable if income exceeds Rs. 10 Lac. for other including corporate bodies, 10% surcharge on tax payable
Education Cess:
Education cess to be levied at the rate of 3% calculated on tax payable plus surcharge w.e.f.April 1,2007.
*Resident individuals,HUF,BOI,AOP,Domestic companies and NRIs.
 
PERSONAL INCOME TAX STRUCTURE
Total Income Tax Rates
Up to INR 150,000(a)(b) NIL
INR 150,001 to INR 300,000 10%
INR 300,001 to INR 500,000 20%
INR 500,001 and above (c) 30%
(a) In the case of a resident woman below the age of 65 years, the basic exemption limit is Rs 180,000.
(b) In the case of a resident individual of the age of 65 years or above, the basic exemption limit is Rs 225,000.

(c) Surcharge is applicable at 10 per cent only where total income axceeds Rs. 10,00,000 (Rs.1 million) per year.

(d) Education Cess is applicable at 3 per cent on income tax (inclusive of surcharge, if any).
 
WEALTH TAX & GIFT TAX FOR MF UNITS
Wealth Tax MF unit are exempt
Gift Tax MF Units are exempt
Income Tax unit provision on dubbing for Gift of Unit
Dividend Income

ST/LT Capital Gain/Loss
As dividend is tax free in hands of holders, hence on tax applicable on either Donee or Donor If the transfree or donee is
Spouse, Son's wife or minor son: gain/loos clubbed with that of the donor of units

Other independent donee: gain/loss treated as donee's gain/loss and not clubbed with that of donor
 
SECURITIES TRANSACTION TAX
Equity Oriented Fund Other than Equity Oriented Fund
  Exempt From Securities transaction tax
Mutual Fund would also pay securities transaction tax wherever applicable on the securities bought/sold

As per Section 94(7)
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 unit are:- (A) Bought within three prior to the record date fixed for dividend declaraction; and (B) Sold within nine month after the record date fixed for dividend declaration.

As per Section 94(8)
The loss due to sale of original unit in the schemes, where bonus Unit are issued, will not be available for setoff; if original unit are:- (A)Bought within three month prior to the record date fixwd for alloment of bonus unit; and (B) sold with in nine month after the record date fixed for allotment of bonus unit.
However, the amount of loss so ignored shall be deemed to be the cost of purchase or acqisition of such unsold bonus unit.