Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: VAT Audit :: empanelment :: cpt :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: TDS :: list of goods taxed at 4% :: due date for vat payment :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
« Direct Tax »
 Pune region tops in direct tax kitty growth
 RBI releases draft directions on hedging of commodity price
 Unexplained deposits in focus, taxmen ordered to go all out in the next three months
 Why India’s corporate tax rate should be cut
 Best ways to save tax under section 80C
 Govt may exceed direct tax collection target of FY18 Budget estimates
 CBDT relaxes MAT provisions for companies under corporate insolvency
 CBDT relaxes norms for MAT on firms facing insolvency
  Income-tax deduction from salaries during the financial year 2017-18 under section 192 of the Income-tax Act, 1961
 CBDT to appeal for revival of certain deregistered companies
 How the new tax regime fared in India these last 6 months

No tax on redemptions and bonus units, CBDT clarifies
February, 17th 2014

Tax authorities were demanding AMCs to pay tax on redemptions and on issue of bonus units.

In a relief to fund houses and investors, the Central Board of Direct Taxes (CBDT) has clarified that AMCs won’t have to pay any tax on redemptions and on issue of bonus units.

Tax authorities were demanding AMCs to pay additional income tax under sub-section (2) to section 115R of the Income Tax Act on payment made to investors at the time of redemptions and issue of bonus units to investors.
"Mutual funds have to pay tax before declaring dividends. The tax authorities went a step further and asked some AMCs to pay tax before paying redemption proceeds to investors. Similarly, in the case of bonus units, bonus is converted as income and issued to investors. The CBDT had asked AMCs to pay tax on bonus units also. The industry had made a representation to CBDT on the same," said Jimmy Patel, CEO, Quantum Mutual Fund.

“Sub-section (2) of section 115R of the Act provides that any amount of income distributed by (i) a specified company or (ii) a mutual fund to its unit holders shall be chargeable to tax and such entities shall be liable to pay additional tax on such distributed income at the rates prescribed therein. The income so distributed by such entities is the dividend paid to unit holders and is liable to tax under this section. However, redemption of units would not attract levy of tax under sub section (2) to section 115R of the Act as such income is not of the nature of ‘income distributed’ to unit holders and hence lies outside the purview of this section,” said a CBDT circular issued on February 11.

CBDT clarified that issue of bonus units is akin to distribution of income by way of dividend and is hence exempted from paying any additional income tax.

Bonus units are issued to existing unit holders as a way to reward them. Unlike dividends where investors get money, bonus units result in additional units being created in the fund. Not many fund houses give bonus units to investors any more.

In another case, Central Board of Direct Taxes (CBDT) had earlier asked some AMCs to cough up income tax for investment made in pass through certificates (PTC) in year 2008-2009

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions