What are the tax benefits available for investing in mutual funds?
The tax benefits for investing in mutual funds are as follows: Twenty percent of the amount invested in specified mutual funds (called equity linked savings schemes or ELSS and loosely referred to as “tax savings schemes”) is deductible from the tax payable by the investor in a particular year subject to a maximum of Rs 2000 per investor. This benefit is available under section 88 of the I.T. Act. In case of capital gains made, investments in National Highway Authority of India (NHAI) or National Bank for Agriculture and Rural Development (NABARD) should be made within six months from the date of sale of the capital asset to avoid paying capital gains tax. This is as per the new ruling under Section 54EC of the Income tax Act. Section 54EA/EB has been abolished in the 2000 budget. The mutual fund is completely exempt from paying taxes on dividends/interest/capital gains earned by it. While this is a benefit to the fund, it is the indirect benefit of unit holders as well. This benefit i
The tax benefits for investing in mutual funds are as follows: Twenty percent of the amount invested in specified mutual funds (called equity linked savings schemes or ELSS and loosely referred to as “tax savings schemes”) is deductible from the tax payable by the investor in a particular year subject to a maximum of Rs.2000 per investor. This benefit is available under section 88 of the I.T. Act. Investment of the entire proceeds obtained from the sale of capital assets for a period of three years or investment of only the profits for a period of 7 years, exempts the asset holder from paying capital gains tax. This benefit is available under section 54EA and 54EB of the I.T. Act. The mutual fund is completely exempt from paying taxes on dividends/interest/capital gains earned by it. While this is a benefit to the fund, it is the indirect benefit of unit holders as well. This benefit is available to the mutual fund under section 10 (23D) of the I.T. Act. A mutual fund has to pay a with
