Taxation

Tax Reckoner 2012-2013

 

Snapshot of Tax rates specific to Mutual Funds

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

12.5% + 5%
Surcharge + 3% Cess
= 13.519%

30% + 5%
Surcharge + 3% Cess
= 32.445%

12.5% + 5%
Surcharge + 3% Cess
= 13.519%

Money Market & Liquid Schemes

25% + 5%
Surcharge + 3% Cess
= 27.0375%

30% + 5%
Surcharge + 3% Cess
= 32.445%

25% + 5%
Surcharge + 3% Cess
= 27.0375%

 

Capital Gains Taxation

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

Equity oriented schemes **

Nil

Nil

Nil

Money market and Liquid schemes

10% without indexation or 20% with indexation whichever is lower+ 3% Cess

10% without indexation or 20% with indexation whichever is lower + 5% Surcharge # + 3% Cess

10% without indexation or 20% with indexation whichever is lower + 3% Cess***

Without indexation

= 10.300%

= 10.815%

= 10.300%

With indexation

= 20.600%

= 21.630%

= 20.600%

Schemes other than Equity oriented schemes (unlisted)

20% with indexation + 3% Cess = 20.6% or,
10% without indexation + 3% cess = 10.3% which ever is lower.

20% with indexation + 5% Surcharge # + 3% Cess = 21.63% or,
10% without indexation + 5% Surcharge # + 3% cess = 10.815% which ever is lower.

10% without indexation + 3% cess = 10.3%$$

 

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 gains

Long term capital gains

Equity oriented schemes

15.450% ##

NIL

Other than Equity Oriented schemes (Listed)

30.900%

20.60%@

Other than Equity Oriented schemes (Unlisted)

30.900%

10.30%

 

*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 NRIs. 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 NRIs 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 highest tax bracket.

 

Top


1.

Income Tax Rates

 

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

 

Total Income

Tax Rates (%)

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

NIL

Rs. 2,00,001 to Rs. 5,00,000 (c)

10%

Rs. 5,00,001 to Rs.10,00,000

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

 

2.

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%

 

3.

Capital Gains

 

Particulars

Short-term capital gains
tax rates (a)

Long-term capital gains
tax rates (a)

Sale transactions of equity shares / units of an equity oriented scheme which attract STT

15%

Nil

Sale transaction of other listed units other than units mentioned above

 

 

Individuals (resident and non-residents)

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 115AB

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 authority

30%

Co-operative society rates

Progressive slab

Sale transaction of un-listed units

Individuals (resident)

Progressive slab rates

20% with indexation 10% without indexation

Firms including LLP (resident)

30%

Resident Companies

30%

Overseas financial organisations specified in section 115AB

40% (Corporate)
30% (non-corporate)

10% for units purchased in foreign currency @@

FIIs

30%

10%@@

Local Authorities

30%

20% with indexation 10% without indexation

Co-operative society rates

Progressive slab

Any other non-resident

40%

10% without indexation$$$

 

(a)

These rates will further increase by applicable surcharge & education cess.

(b)

@@ no indexation benefit would be available

(c)

$$$ As per the Finance Act, 2012

 

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 2012-13

25,750

1,28,750

2,83,250

Effective Tax Savings

-

20,600

20,600

Effective Tax Savings

-

13.79%

6.78%

Resident women below 60 years

Income Level (Rs.)

500,000

1,000,000

1,500,000

Tax in FY 2011-12

31,930

155,530

310,030

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

500,000

1,000,000

1,500,000

Tax in FY 2011-12

-

1,23,600

2,78,100

Tax in FY 2012-13

-

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, 1961or 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.

 

 
 

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS,
READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

 

Disclaimer : The information set out in the Tax Reckoner 2012-13 (the document) is for general purposes only and is not an offer to sell or a solicitation to buy/sell any units of schemes of mutual fund. The information set out is neither a complete disclosure of every material fact of the Income-tax Act, 1961 nor does constitutes tax or legal advice. Investors should be aware that the fiscal rules/ tax laws may change and there can be no guarantee that the current tax position may continue indefinitely. In view of the individual nature of the tax consequences, each investor is advised to consult his/ her own professional tax advisor. The information/ data herein alone is not sufficient and shouldnt be used for the development or implementation of an investment strategy and should not be construed as investment advice. Investors alone shall be fully responsible / liable for any decision taken on the basis of this document. Neither Birla Sun Life Mutual Fund nor Birla Sun Life Asset Management Company Limited nor any person connected with it accepts any liability arising from the use of this information. The investors should before investing in the Scheme(s) of Birla Sun Life Mutual Fund make his/their own investigation and seek appropriate professional advice.

 

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