What are the Tax benefits for investing in Mutual Funds?
• Sec 10 (33): Under the provisions of section 10(33) of the income tax act, 1961, dividend distributed by mutual funds are tax-free in the hands of the investors. • Capital Gains Tax Long Term: • Sec 2 (42A): Under section 2(42A) of the Income Tax Act, a unit of a mutual fund is treated as long term capital asset if the same is held for more than 12 months. • • Sec112: under section 112 of the act, capital gains chargeable on transfer of long term capital assets are subject to following rates of tax. Resident individuals & HUF 20% plus surcharge Partnership firms and Indian companies 20% plus surcharge Foreign companies 20% (No surcharge) Capital gains will be computed after taking into account cost of acquisition as adjusted by cost inflation index notified by the central government. • Under the provisions of Sec 112(1) of Income Tax Act, unit holders can opt for being taxed at 10% (plus surcharge) without the cost inflation index benefit or 20% (plus surcharge) with the cost inflati
