What are the tax provisions for Mutual Fund Units?

The following is the Tax Status in respect of Units of Mutual Funds:

Categories	Short term capital gains tax	Long term capital gains tax	Dividend income	Dividend distribution tax	TDS
Resident individual/ HUF	10%	Nil	Tax free	Nil	Nil
Partnership firms / AOP/BOI	10%	Nil	Tax free	Nil	Nil
Domestic companies	10%	Nil	Tax free	Nil	Nil
NRIs	10%	Nil	Tax free	Nil	STCG - 11.33%* LTCG - Nil

Categories	Short term capital gains tax	Long term capital gains tax	Dividend income	Dividend distribution tax	TDS
Resident individual/ HUF	As per slab	10% (20% with indexation)	Tax free	14.025% (12.5% plus 10% surcharge plus 2% education cess)	Nil
Partnership firms /AOP /BOI **	As per slab	10% (20% with indexation)	Tax free	22.44% (20% plus 10% surcharge plus 2% education cess)	Nil
Domestic companies	30%	10% (20% with indexation)	Tax free	22.44% (20% plus 10% surcharge plus 2% education cess)	Nil
NRIs	As per slab	10% (20% with indexation)	Tax free	14.025% (12.5% plus 10% surcharge plus 2% education cess)	STCG - 30%LTCG - 20%(After providing for indexation)

Surcharge for Resident Indians, Domestic Companies and NRIs:

Education Cess:

Abbreviations used:

Dividend income	ST / LT Capital Gain / Loss
As dividend is tax free in hands of unit holders, hence no tax applicable on either Donee or Donor.	If the transferee or donee is Spouse, son's wife or minor son: Gain / loss 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.

Gift Tax: Mutual Fund units are exempt.

Wealth Tax: Mutual Fund units are exempt.

Equity Fund	Other than Equity Fund
0.25% of redemption value.	Exempt from securities transaction tax on redemption value.

However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units.

Why should you invest in ELSS ?

Excellent returns: Historical Returns from ELSS have been very attractive. You will discover that these returns have been much higher than other traditional tax-saving instruments. ELSS Schemes also have the shortest lock-in period compared to any other tax-saving instruments in India.

Safety: Due to the 3-year lock-in period, the Investment Manager can take a long-term view to invest the funds in equity. The real potential of equities shows up only after a few years. The manager is not under pressure to take risky, aggressive investment decisions to deliver short-term returns

Tax-free income: The dividends you earn will be tax-free. When you sell the units of ELSS, you can avail of long-term capital gain under the Income Tax Act, which is exempt from tax.

Systematic Investment Plan: You can invest as less as Rs 500 at regular intervals. You take advantage of fluctuations in the stock markets by rupee-cost averaging.

How does SystematixGroup help you?

With several schemes in the market today, selecting the right scheme can be quite a task. We at SystematixGroup provide you with detailed information on every Mutual Fund scheme to help you shortlist the best ones. You can also compare peer schemes, see top performing schemes across types and decide where to invest with just a click of a button.

We offer the facility of Systematic Investment Plans (SIP).

We also spare you of the hassles of searching for an application form, filling it up and writing cheques. This ensures you don’t miss any opportunities. So what are you waiting for? Take the first step to start your journey towards building wealth. Just fill in your contact details. Our representative will be in touch shortly