If you buy mutual funds, Finance Bill 2011-12 has tax shocker for you!

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Forget tax relief, money market fund , liquid fund and even all other kinds of mutual fund got a shocker as tax rate on income distributed by them has been increased by Budget 2011-12 . Dividend Distribution Tax for mutual fund industry is provided in section 115R of the I T Act which is now proposed to be modified as under

( the old rate is in blue where as new DDT tax rate is given in Red ).

New tax rate of DDT on

Money market mutual fund or a liquid fund

  1. 25 % on income distributed to any person being an individual or a HUF

  2. 30% (previously 25 % ) on income distributed to any other person.

By any other mutual fund, the new tax rate will be

  1. 12.5 % on income distributed to any person being an individual or a Hindu undivided family by a fund other than a money market mutual fund or a liquid fund;

  2. 30 % ( previously it was 25 0% ) on income distributed to any other person

How will this affect you ?

Naturally, the mutual fund industry will indirectly put you this burden somehow . As such , your investment instrument has just got costlier.

1 COMMENT

  1. After Wade Barrett hit the DDT on Cena on the concrete floor (you could hear it), I thought it was over and that Nexus would win. Then, before Justin Gabriel was about to land the 450 splash on Cena, he rolled out of the way and pinned Gabriel. Then, he got the STFU on Barrett.

    How in the world did Cena recover from that DDT? He is like Superman!!