Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: cpt :: ACCOUNTING STANDARD :: due date for vat payment :: form 3cd :: list of goods taxed at 4% :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: Central Excise rule to resale the machines to a new company :: TDS
 
 
News Headlines »
 Directions under section 119 of the Income-tax Act, 1961
 Securities excluded from GST ambit in revised Bill
 GST dilemma: Hope fades for new tax regime
 5nance.com launches tax investment platform
 Is government tapping your phone?
 Income tax department to use analytics to look for discrepancies in bank accounts
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful

Portfolio management profits to be taxed at 10%
July, 19th 2006
This would be music to Portfolio Management Service (PMS) providers. Profits generated by portfolio management will be treated as investment income, and attract short term capital gains tax at the rate of 10%.

PMS profits will not be treated as business income, which would attract the applicable marginal rate of income tax. Around Rs 7,000 crore is churned annually by the PMS market.

The breather is expected as a part of the formal guidelines to be issued by the Central Board of Direct Taxes (CBDT) to its field formations on whether a person is a trader in stocks or an investor in stocks, soon.

Revenue department officials thought there was no reason to classify investors in PMS as traders, senior officials told ET. The income tax department had sought suggestions from the general public in May this year, to decide who should be treated as a trader in stocks and who should be treated as an investor.

The consultation had run into controversy immediately, as there was a presumption that foreign institutional investors (FIIs) too could be treated by assessing officers as traders in stocks, instead of investors, who are liable to pay only the 10% short term capital gains tax. Finance minister P Chidambaram subsequently clarified that there was no such move on FIIs.

CBDT has received numerous suggestions on the proposal, including the one to keep senior citizens dabbling in stock trading out of the proposed tax net. The PMS managers churn portfolio as per the price targets given by their clients. They, therefore, enter or exit scrips, when the price levels indicated by the clients are reached.

This is a different strategy from that of mutual funds, where the investments in the market are made by the investment managers. The clients essentially do not have any say on investment matters.

Despite the frequent churning of the portfolios, under these managers, the I-T department feels that since these are transactions carried out on behalf of clients, who are investors and not traders, only short-term capital gains should apply.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

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