MF dividends now taxable at 10%
7 years, 1 month ago

MF dividends now taxable at 10%

The Hindu  

The government has proposed a 10% tax on dividends doled out by equity-oriented mutual funds as part of its overall levy of taxes on equity investments that also saw the finance minister re-introduce long term capital gains tax. ‘Will impact fund flow’ “This move may impact flows into funds where investors were primarily entering with the expectation of regular dividends,” said Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Adviser India. Distributors and fund houses marketed many balanced funds to investors by highlighting the regular tax-free dividend payout option, which was a big draw at a time when interest from bank deposits were taxable. Mis-selling has meant that the average balanced fund size is now Rs.5,092 crore versus average equity large-cap fund at Rs.2072 crore,” said Aashish Somaiyaa, MD & CEO, Motilal Oswal AMC. “Fund houses have to realign the income distribution strategy; dividend stripping may get controlled while the investors may end up paying tax even in the short term,” said Jimmy Patel, MD & CEO, Quantum AMC.

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History of this topic

An annual mutual fund ritual
2 months ago

An annual mutual fund ritual

The Hindu  

Previously, in this column, we discussed the cost of switching from a regular plan to a direct plan for your mutual fund investments. If you choose the IDCW option, you must find avenues to reinvest the cash flows received from the MF. Therefore, if cash flows from IDCW continue to be taxed at your marginal tax rate, the growth option …

Mutual Fund SIP: How Will Budget 2024 Impact Tax Calculations on Capital Gains?
8 months ago

Mutual Fund SIP: How Will Budget 2024 Impact Tax Calculations on Capital Gains?

News 18  

The Union Budget 2024-25 increased taxes on short-term capital gains and long-term capital gains for equity-oriented funds. The budget, announced on July 23, raises the STCG tax on equity mutual funds to 20% from the previous 15%, while the LTCG tax has increased to 12.5% from 10%. Equity mutual funds remain a popular choice for Indian investors seeking exposure to …

June equity MF inflows rise fourfold to ₹40,608 cr.: AMFI
8 months, 2 weeks ago

June equity MF inflows rise fourfold to ₹40,608 cr.: AMFI

The Hindu  

Equity mutual funds rose 370% to ₹40,608.19 crore in June 2024, from ₹8,637.49 crore in June 2023, data released by Association of Mutual Funds in India show. Indian mutual fund sector’s net asset under management crossed ₹60 lakh crore in June 2024, a rise of ₹10 lakh crore since December 2023. Debt mutual funds witnessed a surge in outflows at …

Budget expectations from individual taxpayers, investors
1 year, 2 months ago

Budget expectations from individual taxpayers, investors

New Indian Express  

“The other demands are to make pensions tax-free in the hands of annuitants. Level-playing field between mutual funds and Ulips: At present, capital gains made from Unit-linked Insurance Plans are tax-free if the annual premium is less than R2.5 lakh. MF industry has been demanding a level playing field between Ulips and equity mutual funds as far as tax on …

Your Questions Answered: What is a dividend yield mutual fund? Can I get regular income from it?
1 year, 10 months ago

Your Questions Answered: What is a dividend yield mutual fund? Can I get regular income from it?

Live Mint  

Q. I am a 61-year-old retired architect. Advantages The advantages of investing in a dividend yield fund are: It may provide a regular source of income for investors who seek periodic cash flows from their investments. Investing in a dividend yield fund reduces your risk relatively when compared to other equity mutual funds since the investee companies in the case …

Debt Mutual Funds Not Fixed Deposit, Has Underlying Risks. Hence, It Requires Tax Benefits Like Equity
2 years ago

Debt Mutual Funds Not Fixed Deposit, Has Underlying Risks. Hence, It Requires Tax Benefits Like Equity

ABP News  

In a surprising move, debt mutual fund taxation laws were changed abruptly as the Narendra Modi government amended the Finance Bill 2023. Currently, any capital gain on redemption of a debt fund held for three years or longer is treated as long-term capital gain and is taxed at a flat 20 percent with indexation benefit. Any capital gain on redemption …

Government scraps long-term tax benefit for debt mutual funds investing less than 35% assets in equity
2 years ago

Government scraps long-term tax benefit for debt mutual funds investing less than 35% assets in equity

The Hindu  

The government has scrapped the long-term capital gains treatment for income from debt mutual funds and other schemes that invest upto 35% in equity shares of domestic companies. “An arbitrage is being created right now where interest income from debt mutual funds is not distributed and converted into long term capital gains of 20%. “The amendment will treat gains from …

India Likely to Propose Removing Long-Term Capital Gains for Debt Mutual Funds: Report
2 years ago

India Likely to Propose Removing Long-Term Capital Gains for Debt Mutual Funds: Report

News 18  

India may propose that investments in debt mutual funds be taxed as short-term capital gains, according to a source with knowledge of the matter, a move that could strip investors of the long-term tax benefits that made such investments popular. Currently, investors in debt funds pay income tax on capital gains according to the income tax slab for a holding …

How is income from mutual funds taxed? All you need to know
2 years, 4 months ago

How is income from mutual funds taxed? All you need to know

Firstpost  

One receives income from regular dividends and capital gains on the sale of shares when one invests in a mutual fund. The holding period and the type of mutual fund decides the tax rate on capital gains arising from mutual funds An investor gets access to diversified and professionally managed portfolios through mutual funds. Short-term capital gains, earned on redeeming …

Mutual fund 'dividend' is a misnomer. And tax-inefficient, too
3 years, 9 months ago

Mutual fund 'dividend' is a misnomer. And tax-inefficient, too

Live Mint  

While investing in mutual funds, a question that comes up often is whether to invest in the "dividend" option or the "growth" option. The growth option of investing in mutual funds is where the profit made by the scheme’s portfolio is automatically reinvested into the scheme and the investor’s investment simply grows in value. “Those resident individuals, whose taxable income, …

Income tax on dividends: All you want to know
4 years, 4 months ago

Income tax on dividends: All you want to know

Live Mint  

By Rajeshree Sabnavis and Saurabh Shah Shareholders are entitled to the profits of the company and such profit when distributed is termed as ‘dividend’. Further, in 2017, the government decided to tax dividend in the hands of shareholders, who had an annual dividend income in excess of ₹10 lakh. > Resident corporate shareholders shall also have a higher tax outflow …

Taxation of dividends, back to classical system
5 years ago

Taxation of dividends, back to classical system

Live Mint  

It’s almost a month since the Union budget was presented and by now taxpayers and other stakeholders have gone through the fine print to understand the implications of various announcements. One such budget announcement which has brought relief to taxpayers is the proposal to abolish the dividend distribution tax payable by Indian companies and restoring the classical system of taxing …

Budget proposals on DDT, personal tax not to impact MF industry: Franklin Templeton Mutual Fund
5 years, 1 month ago

Budget proposals on DDT, personal tax not to impact MF industry: Franklin Templeton Mutual Fund

Firstpost  

The proposed changes in Dividend Distribution Tax and the new income tax system announced in the budget will not have any adverse impact on the mutual fund industry that showed resilience and maintained robust growth amid economic headwinds, a senior mutual fund official said Kolkata: The proposed changes in Dividend Distribution Tax and the new income tax system announced in …

Mutual fund industry body seeks clarification from tax authorities on removal of DDT, TDS introduction
5 years, 1 month ago

Mutual fund industry body seeks clarification from tax authorities on removal of DDT, TDS introduction

Firstpost  

New Delhi: Industry body AMFI has sought clarification from relevant tax authorities with regard to the government’s plan to scrap dividend distribution tax on mutual funds and introduction of tax deducted at source on the income distributed by such products, fund managers and officials have said. “It is hereby clarified that under the proposed section, a mutual fund shall be …

Dividend will be taxed in hands of investors: Nirmala Sitharaman
5 years, 1 month ago

Dividend will be taxed in hands of investors: Nirmala Sitharaman

Deccan Chronicle  

Mumbai: Much awaited announcement on Dividend Distribution Tax received mixed response as the equity market fell sharply in contrast to finance minister Nirmala Sitharaman’s wish to make equity market more attractive. “In order to increase the attractiveness of the Indian equity market and to provide relief to a large class of investors, I propose to remove the DDT and adopt …

In income tax rule change, govt considers tweaking dividend distribution tax
5 years, 4 months ago

In income tax rule change, govt considers tweaking dividend distribution tax

Live Mint  

The government is considering changes to its dividend distribution tax that will raise returns for investors, according to people familiar with the matter, as authorities try to revive foreign fund inflows. The budget statement due February will probably include a proposal to tax dividends once they are paid to shareholders, rather than the current system where the company pays the …

Govt’s new buyback tax set to hit MF investors, shareholders alike
5 years, 8 months ago

Govt’s new buyback tax set to hit MF investors, shareholders alike

Live Mint  

The new budget proposal to tax buybacks and dividends at the same rate of effectively 20% may curtail the flow of distribution—that companies undertake from time to time to give investors a share in their profits—to the shareholders. TCS repeated the offer in 2018 and was joined by majors such as HCL Technologies Ltd and Mphasis Ltd, while Infosys announced …

10 changes in income tax rules this year
6 years, 3 months ago

10 changes in income tax rules this year

Live Mint  

From long-term capital gains tax on equity investments to higher interest income exemption for senior citizens to introduction of dividend distribution tax on dividend received from equity mutual funds, this year saw many changes in income tax rules. Here are some of the important changes in income tax rules: 1) Higher interest income exemption for senior citizens For senior citizens, …

Indian mutual funds beat global growth pace by over 100%
6 years, 6 months ago

Indian mutual funds beat global growth pace by over 100%

Live Mint  

In the last 10 years, India’s mutual fund industry has grown 12.5% annually on average, outperforming the growth clocked by the world and developed regions by more than double, according to a report by the Association of Mutual Funds of India and global analytics firm Crisil. “Around the same time last year, there was a rising equity market, low rates …

Mutual fund taxation rules – How gains, dividends are taxed in 10 points
6 years, 6 months ago

Mutual fund taxation rules – How gains, dividends are taxed in 10 points

Live Mint  

The assets under management of Indian mutual fund industry has crossed ₹ 25 trillion mark. The income tax rules on mutual fund gains and dividends depend on the type of fund — debt or equity — and the duration of investment. 4) Also if you had invested equity mutual funds or shares before 31 January 2018, gains till that date …

Equity mutual funds log Rs 10,585 cr inflow in July; total investment crosses Rs 43k cr so far this fiscal
6 years, 7 months ago

Equity mutual funds log Rs 10,585 cr inflow in July; total investment crosses Rs 43k cr so far this fiscal

Firstpost  

Strong inflow pushed the asset base of equity mutual funds by more than 10 percent to Rs 8.3 lakh crore by July-end from Rs 7.5 lakh crore at end-March. New Delhi: Investors pumped a staggering Rs 10,585 crore in equity mutual funds in July, mainly driven by strong corporate earnings and near normal monsoon. With this, total inflow has reached …

No reduction in inflows for mutual funds after LTCG, says AMFI
7 years, 1 month ago

No reduction in inflows for mutual funds after LTCG, says AMFI

The Quint  

Kolkata, Feb 13 The mutual funds industry does not see any reduction in the inflows of funds after the proposal of long term capital gains tax and dividend distribution tax, an official said here on Tuesday.The industry also expects there would be no level playing field between mutual funds and unit linked insurance plan after the introduction of LTCG and …

Budget 2018: Why mutual fund investments continue to remain attractive saving option despite return of LTCG tax
7 years, 1 month ago

Budget 2018: Why mutual fund investments continue to remain attractive saving option despite return of LTCG tax

Firstpost  

In his Union Budget 2018 speech, finance minister Arun Jaitley revealed that the government was bringing back tax on long term capital gains made on equities, equity linked mutual funds or equity related business trusts. According to this Times of India report despite the re-introduction of LTCG tax, the investments made in equity related mutual funds still remained profitable. Finance …

Budget 2018: Investors to pay 10% tax on distributed income from equity Mutual Funds
7 years, 1 month ago

Budget 2018: Investors to pay 10% tax on distributed income from equity Mutual Funds

Firstpost  

While unveiling the Budget proposals for 2018-19, Finance Minister Arun Jaitley also proposed to introduce 10 percent tax on long-term capital gains from stock markets, exceeding Rs 1 lakh. New Delhi: Investors will have to pay 10 percent tax on distributed income from equity-oriented mutual funds, as per the Budget proposals announced on Thursday. “Sentiments may get impacted as mutual …

Rationalise DDT rate to 10% in upcoming Budget, industry body CII tells govt
7 years, 2 months ago

Rationalise DDT rate to 10% in upcoming Budget, industry body CII tells govt

Firstpost  

Industry body CII has sought rationalisation of the dividend distribution tax rate to 10 percent in the upcoming Budget to encourage participation of different stakeholders in the country’s financial markets New Delhi: Industry body CII has sought rationalisation of the dividend distribution tax rate to 10 percent in the upcoming Budget to encourage participation of different stakeholders in the country’s …

Tax Woes Much? To Woo the Investors, Keep It Simple Mr Jaitley
8 years, 2 months ago

Tax Woes Much? To Woo the Investors, Keep It Simple Mr Jaitley

The Quint  

Reduce the list of capital assets to what is material and relevant. The concept of “block of assets” needs to be eliminated from the present tax code, as the tax differential between the short-term capital gains tax vs corporate tax rate has already been reducing and is expected to become minimal in future. Furthermore, in comparison to the fast moving …

Investors pump in Rs 1 lakh cr in MFs in July after June redemption
8 years, 7 months ago

Investors pump in Rs 1 lakh cr in MFs in July after June redemption

Firstpost  

With this, total net inflow in MF schemes has crossed over Rs 1.93 lakh crore in April-July of 2016-17 New Delhi: Investors pumped in a staggering over Rs 1 lakh crore into various mutual fund schemes in July, with liquid and income segments contributing most to the inflow. According to data from the Association of Mutual Funds in India, investors …

Simplifying taxation for all alternative investment funds
10 years, 1 month ago

Simplifying taxation for all alternative investment funds

Live Mint  

Alternative Investment Funds in India have emerged as a robust and well-regulated platform for providing growth capital to various sectors of the economy. It is important to note that while the erstwhile VC regulations recognized only a venture capital fund, the new AIF guidelines provide a framework to float different types of funds. For example, under section 10 of the …

Reliance MF full-year profit up 22%
10 years, 10 months ago

Reliance MF full-year profit up 22%

The Hindu  

Reliance Capital Asset Management Company, which runs leading fund house Reliance Mutual Fund, has posted 22 per cent growth in profit at Rs 352 crore for the financial year 2013-14. RCAM’s profit before tax grew by 22 per cent to Rs 352 crore last fiscal ended March 31, from Rs 290 crore in 2012-13. “Our focus on increased retail participation …

Equity funds step up dividends after robust 2012 gains
12 years, 2 months ago

Equity funds step up dividends after robust 2012 gains

India TV News  

New Delhi, Jan 15: After reaping rich returns with their stock investments in 2012, mutual funds have begun the new year on a high note with plans to pay dividends to their investors in equity funds. Mutual funds, which are among the most significant players in the country's stock market, sold equities worth Rs 20,000 crore last year as they …

MF industry wants consumers to pay service tax on schemes
12 years, 8 months ago

MF industry wants consumers to pay service tax on schemes

Firstpost  

The mutual funds industry wants higher administrative expenses for schemes and it also wants consumers to bear the burden of 12 percent service tax on purchase of schemes. The mutual fund industry wants the consumers to bear the burden of 12 percent service tax on purchase of schemes and has also pitched for higher administrative expenses during their meeting with …

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