Find out about the role that taxes play in investments.
Tax Issues regarding Mutual Fund
Taxation of investing in Mutual Fund SchemesThe information stated below is based on UTI Mutual Fund's understanding of the tax laws [Income Tax Act 1961 as amended by the Finance (No.2) Act 2014] and is only for the purpose of providing general information to the investors of the Mutual Fund Schemes (Schemes). The information/interpretations/requirements provided may undergo modifications due to changes in regulatory dispensation or otherwise. As in the case with any investment there can also be no guarantee that the tax position prevailing at the time of investment in the Schemes will endure indefinitely.Further statements with regard to tax position mentioned herein, is on the assumption that the units are not held as stock-in-trade and below are merely indicative, not exhaustive, expressions of opinion, interpretative, subject to any judicial/administrative rulings/orders/interpretations, and are not representations of the Mutual Fund to induce any investor to acquire units whether directly from the Mutual Fund or indirectly from any other person/s by the secondary market operations and UTIMF/UTIAMC UTI Trustee Company shall not be responsible for the same in any manner. Thus the prospective investors should not treat the contents of this section as advice relating to legal, taxation, investment or any other matter and are advised to consult its/his or her own tax/legal consultant with respect to the tax implications arising out of his or her or their participation in the Schemes and the approvals/registrations etc. which are required to be obtained by the investor for making investment/transactions.
Tax issues concerning Mutual Fund : UTI Mutual Fund is a Mutual Fund registered with SEBI and as such is eligible for benefits under section 10 (23D) of the Income Tax Act, 1961 ("the Act") to have its entire income exempt from income tax.The Mutual Fund receives all income without any deduction of tax at source under the provisions of Section 196(iv) of the Act.
As per section 115TA of Chapter XII-EA (Special provisions relating to tax on distributed income by Securitisation Trusts) (income distributed to the Pass Through Certificate holders) inserted w.e.f. 1st June 2013:
a) any amount of income distributed by the securitisation trust (as defined) to its investors (as defined) shall be chargeable to tax and such securitisation trust shall be liable to pay additional income-tax on such distributed income at the rates specified therein,
b) Provided that no such tax shall be chargeable/payable in respect of any income distributed by the securitisation trust to any person in whose case income, irrespective of its nature and source, is not chargeable to tax under the Act (which will include UTI Mutual Fund, if holding any securitized debt instrument or securities issued by the securitization trust, as its entire income is exempt under section 10(23D) of the Act).
As per Section 10(35A) of the Act, inserted w.e.f. 1st April 2013, any income by way of distributed income referred to in section 115TA of Chapter XII-EA of the Act received from a securitisation Trust by any person being an investor (as per the definition, will include UTI Mutual Fund if holding any securitized debt instrument or securities issued by the securitization trust) of the said Trust shall not form part of total income and hence be exempt from income tax.By virtue of section 45 of the Wealth Tax Act, 1957, wealth tax is not chargeable in respect of net wealth of a Mutual Fund, hence UTI Mutual Fund is not liable to pay Wealth Tax under the