A. Applicable Income Tax Rates – Investments in Mutual Fund Schemes

Tax rates  for  Financial  Year 2012-13

Tax Implication on Dividend received by Unitholders

Resident Individual/HUF

Domestic Corporates

NRI**

Dividend

Equity Oriented Schemes

Tax Free

Tax Free

Tax Free

Other than Equity Oriented Schemes

Tax Free

Tax Free

Tax Free

Dividend Distribution Tax (Payable by the Scheme)
Equity Oriented Schemes*

Nil

Nil

Nil

Other than Equity Oriented Schemes

1 2.5%+5% Surcharge+3%

Cess

30%+5% Surcharge+3% Cess

1 2.5%+5% Surcharge+3%

Cess

=13.519%

=32.445%

=13.519%

Money Market & Liquid Schemes

25%+5% Surcharge+3% Cess

30%+5% Surcharge+3% Cess

25%+5% Surcharge+3% Cess

=27.0375%

=32.445%

=27.0375%

 

Capital Gain Taxation

Long Term Capital Gains (Units held for more than 12 months)

Equity Oriented Schemes*

Nil

Nil

Nil

Other than Equity Oriented Schemes (listed) 10% without indexation or 20% with indexation which ever is lower + 3% Cess 10% without indexation or 20% with indexation which ever is lower + 5% Surcharge # + 3% Cess 10% without indexation or 20% with indexation which ever is lower + 3% Cess***
Without Indexation

=10.300%

=1 0.81 5%

=10.300%

With Indexation

=20.600%

=21.63%

=20.600%

Schemes other than Equity oriented schemes (unlisted)

20% with indexation + 3%
Cess = 20.6%

20% with indexation + 5% Surcharge
# + 3% Cess = 21.63%

10% without indexation +
3% cess = 1 0.3%$$

Short Term Capital Gains (Units held for 12 months or less)

Equity Oriented Schemes*

15% + 3% Cess

15% +5% Surcharge # + 3% Cess

15% + 3% Cess

=15.450%

=16.223%

=15.450%

Other than Equity Oriented Schemes

30%” + 3% Cess

30% +5% Surcharge # + 3% Cess

30%” + 3% Cess

=30.900%

=32.445%

=30.900%

Tax deducted at source pertaining to NRI Investors$

Short Term Capital Gain

Long Term Capital Gain

Equity Oriented Schemes 15.450% ##

Nil

Other than Equity Oriented schemes 30.900%

20.60%@

 

*STT @ 0.25% will be deducted on equity oriented schemes at the time of redemption and switch to the other schemes. Mutual

Fund would also pay securities transaction tax wherever applicable on the securities bought/sold

** The tax rates are subject to DTAA benefits available to NRI’s. As per the Finance Act, 2012, submission of tax residency certificate containing prescribed particulars, will be a necessary (though not sufficient) condition for granting DTAA benefits to non-residents

*** These are the tax rates applicable to capital gains, in case the rate of tax is lower than 20% and if the NRI does not have a Permanent Account Number, then for the purpose of TDS, the withholding tax rate would be 20%

# The total income of the corporate would exceed Rs. 1 Crore ## Subject to NRI’s having Permanent Account Number in India $ As per the Finance Act 2012, with effect from July 1, 2012, a list of transactions is proposed to be specified, wherein the rate for tax deduction at source needs to be determined by the assessing officer. In case the transaction of sale of mutual fund units by an NRI gets covered within such list, then an application would be required to be made to the assessing officer to determine the tax deduction at source rate

$$ As per the Finance Act, 2012, in case of transfer of unlisted securities by non-resident, the tax rates in case of long term capital gains shall be 10% (plus surcharge and cess) without indexation

@ after providing for indexation

“Assuming the investor falls into the highest tax bracket

 

B.                                   INCOME                                  TAX                                               RATES

(i) For Individual, Hindu Undivided Family, Association of Persons, Body of Individuals and Artificial juridical persons.

Taxable Income

Tax Rates (%)

Upto Rs.2,00,000 (a)(b)

Nil

Rs. 2,00,00 1 to Rs. 5,00,000 (c)

10%

Rs. 5,00,00 1 to Rs.1 0,00,000

20%

Rs. 10,00,000 and above

30%

 

(a) In the case of a resident individual of the age of sixty years or above but below eighty years, the basic exemption limit is Rs. 2,50,000

(b)   In the case of a resident individual of the age of eighty years or above, the basic exemption limit is Rs.5,00,000/- (c) Education cess is applicable @ 3 percent of income-tax. No Surcharge is applicable. Marginal relief may be available

(ii).            Securities Transaction Tax (STT)

STT is levied on the value of taxable securities transactions as under:

Transaction

Rates

Payable By
Purchase/ Sale of equity shares, units of equity oriented scheme (delivery based) (w.e.f. July 1, 2012 as per the provisions of Finance Act, 2012)

0.1 %*

Purchaser/Seller
Sale of equity shares, units of equity oriented scheme (non delivery based)

0.025%

Seller
Sale of an option in securities

0.017%

Seller
Sale of an option in securities, where option is exercised

0.125%

Purchaser
Sale of a futures in securities

0.017%

Seller
Sale of unit of an equity oriented scheme to the Mutual Fund

0.250%

Seller

 

* Upto June 30, 2012, the rate would be 0.125%

(iii).  Capital Gain

Sr no Particulars Short Term capital gains tax rates (a) Long Term capital gains tax rates (a)
I Sale transaction s of equity shares / units of an equity oriented scheme which attract STT

15%

Nil

II Sale transaction of other listed units other than units mentioned above
Individuals (resident and non-resident)

Progressive slab rates

20% with indexation, 10% without indexation
Firms including LLP (resident and non-resident)

30%

Resident Companies

30%

Overseas financial organisations specified in section 11 5AB

40% (Corporate)

30% (non-corporate)

10% for units purchased in
foreign currency @@

FIIs

30%

10%@@

Other Foreign Companies

40%

20% with indexation/ 10% without indexation
Local Authorities

30%

20% with indexation/ 10% without indexation
Co-Operative Society Rates

Progressive Slab

III Sale transaction of un-listed units
Individuals (resident)

Progressive slab rates

20% with indexation
Firms including LLP (resident)

30%

20% with indexation
Resident Companies

30%

20% with indexation
Overseas financial organisations specified in section 11 5AB

40% (Corporate)

30% (non-corporate)

10% for units purchased in foreign currency @@
FIIs

30%

1 0%@@
Local Authorities

30%

20% with indexation
Co-Operative Society Rates

Progressive Slab

20% with indexation
Any other non-resident

40%

10% without indexation$$$

(a) These rates will further increase by surcharge, if applicable & education cess @@ no indexation benefit would be available

$$$ As per the Finance Act, 2012

C. Personal Tax Scenarios

Individuals other than below categories

Income Level (Rs.)

500,000

1,000,000

1,500,000

Tax in FY 2011-12

32,960

156,560

311,060

Tax in FY 2012-13

30,900

133,900

288,400

Effective Tax Savings

2,060

22,660

22,660

Effective Tax Savings

6.25%

14.47%

7.28%

Resident  Senior Citizen ( age of 60 years but
below 80 years)

Income Level (Rs.)

500,000

1,000,000

1,500,000

Tax in FY 2011-12

25,750

1,49,350

3,03,850

Tax in FY 201 2-13

25,750

1,28,750

2,83,250

Effective Tax Savings

20,600

20,600

Effective Tax Savings

13.79%

6.78%

Resident woman below 60 years

Income Level (Rs.)

500,000

1,000,000

1,500,000

Tax in FY 2011-12

31,930

1,55,530

3,10,030

Tax in FY 2012-13

30,900

1,33,900

2,88,400

Effective Tax Savings

1,030

21,630

21,630

Effective Tax Savings

3.23%

13.91%

6.98%

Resident  very senior citizen at the age of 80
years and above

Income Level (Rs.)

500,000

1,000,000

1,500,000

Tax in FY 2011-12

1,23,600

2,78,100

Tax in FY 201 2-13

1,03,000

2,57,500

Effective Tax Savings

20,600

20,600

Effective Tax Savings

16.67%

7.41%

 Notes:

1)   The tax rates mentioned above are those provided in the Income tax Act, 1961, applicable for the financial year 2012-13 relevant to assessment year 2013-14. In the event of any change, we do not assume any responsibility to update the tax rates consequent to such changes. The proposals of the Draft Direct Taxes Code Bill, 2010 have not been considered herein.

2)   The tax rates mentioned above are only intended to provide general information and are neither designed nor intended to be a substitute for professional tax advice. Applicability of the tax rates would depend upon nature of the transaction, the tax consequences thereon and the tax laws in force at the relevant point in time. Therefore, users are advised that before making any decision or taking any action that might affect their finances or business, they should take professional advice.

3) A non-resident tax payer has an option to be governed by the provisions of the Income tax Act, 1961 or the provisions of the relevant Double Taxation Avoidance Agreement, whichever is more beneficial. As per the Finance Act, 2012, submission of tax residency certificate containing prescribed particulars, will be a necessary (though not sufficient) condition for granting benefits under the Double Taxation Avoidance Agreements to non-residents.

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