Taxation & E-filing
We provide complimentary E-filing of returns to our clients and assist in the process of Tax Planning in India.
Check list of E Filing
Check List for ITR of Salaried Employees.
o Detail Of Salary
o Income From Business Or Profession
o Income From House Property
o Detail Of Long Term Capital Gain(LTCG) & Short Term Capital Gain(STCG)
o Any other Income
• Tax Details:
o Photocopy Of Form 16 & Form 16A
o Photocopy Of Advance Tax Paid Challan
o Any other TDS details
o Photocopy Of Deduction u/s 80C, 80CCC, 80CCD
o Investment In Infrastructure Bond Upto Rs. 20,000/- u/s 80CCF
o Letter Of Interest & Principal On Housing Loan Upto 1,50,000/- Only u/s 24
o Deduction Medical Insurance U/S 80D Rs 20,000/- for Senior Citizen & Rs 15,000/- For Other.
o Letter Of Interest On Education Loan U/S 80E
o Donation U/S 80G, 80GGA
o Contribution to Political Party u/s 80GGB, 80GGC
o Certificate Of Doctor For Suffering From Physical Disability U/S 80U Upto Rs.50,000/-
o Any Expenses Incurred For Handicapped Dependent Relative U/S 80DD Upto Rs 50,000/-
o Any Expense incurred on treatment of specified disease of self or dependent upto Rs 40,000/- u/s 80DDB
o Any other allowable deductions
• Other Documents:
o Full Bank Detail for Refund
o Proof of Address
o Photocopy Of PAN No.
o Date of Birth Proof.
o Email Address
o Phone No & Mobile No.
For Mutual Fund investors, please find below the information for Tax planning.
Mutual Fund Company and unit holders are subject to certain tax laws under the Income tax act which are discussed below:
ØTax benefits to the mutual fund
Tax benefits to the mutual fund
Mutual Funds are registered with the Securities and Exchange Board of India and hence the entire income of the fund will be exempt from income-tax in accordance with the provisions of Section 10(23D) of the Income-tax Act, 1961 (the Act). The Fund is entitled to receive all income without any deduction of tax at source under the provisions of Section 196(iv), of the Act. However, as per the taxation laws in force, read with Chapter VII of the Finance (No. 2) Act, 2004 pertaining to Dividend Distribution Tax, it is provided that on income distribution, if any, made by the Fund, on or after 1 April, 2004, to its Unit holders, being Individuals and Hindu Undivided Family, income-tax will be payable under Section 115R of the Act, at the rate of 14.025 % (inclusive of surcharge and additional surcharge called Education Cess on income-tax), and to other Unit holders at the rate of 22.44% (inclusive of surcharge and additional surcharge called Education Cess on income-tax), except, inter alia, in the case of equity-oriented funds (including close ended equity funds)(i.e. such fund where the investible funds are invested by way of equity shares in domestic companies to the extent of more than 50% (65% w.e.f 1/6/06) of the total proceeds of such Fund), where no such tax will be payable.
Tax benefits to the unitholders
Income received in respect of units of a mutual fund, where income distribution is made on or after
1st April, 2003, would be Exempt from income-tax in the hands of the unit holders under Section 10(35) of the Act.
Tax Deduction at Source
In view of the exemption of income in the hands of the unit holders, no income tax is deductible at source, on income distribution by The Mutual Fund, under the provisions of Sections 194K and 196A of the Act.
Capital Gains Tax
All Unit holders
Under Section 10(38) of the Act, capital gains arising on transfer of a long-term capital asset held for a period of more than twelve months, interalia, being a unit of an equity-oriented fund would be exempt from income-tax, if sale of such unit is made on or after 1st October, 2004 and such transaction has been chargeable to securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004 pertaining to Securities Transaction Tax (STT).
The Finance Act, 2006 has with effect From 1st June, 2006 increased the STT rates from 0.20% to 0.25% on sale of units to the mutual fund and from 0.10% to 0.125% for delivery-based sale through stock exchange. Under Section 54EC of the Act and subject to the conditions specified Therein, taxable capital gains, arising on transfer of a long- term Capital asset, shall not be chargeable to tax to the extent such Capital gains are invested in certain notified bonds within six Months from the date of transfer. No deduction from the amount of Income with reference to such investment shall be allowed under Section 80C after the 1st day of April 2005. Under Section 54ED of the Act and subject to the conditions Specified therein, taxable capital gains (subject to the exemption of long-term capital gains provided for in section 10(38) of the Act, discussed elsewhere in this Statement) arising before the1st day of April, 2006 from transfer of long term assets, inter Alia, being listed securities or units shall not be chargeable to tax to the extent such gains are invested in acquiring equity shares
Forming part of an "eligible issue of share capital" within six months from the date of transfer of the long-term assets. Eligible issue of Share capital has been defined as an issue of equity shares which Satisfies the following conditions: the issue is made by a public company formed and registered in
India; and the shares forming part of the issue are offered for subscription to the public. No deduction from the amount of income with reference to such investment shall be allowed under section 80C after the 1st day of April 2005.
Under Section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a HUF, capital gains (subject to the exemption of long-term capital gains provided for in section 10(38) of the Act, discussed elsewhere in this Statement) arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If part of such net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on a proportionate basis. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The following amounts would be deductible from the full value of consideration, to arrive at the amount of capital gains: cost of acquisition of Units (excluding the Securities Transaction Tax, if any paid on acquisition) as adjusted by cost Inflation Index notified by the Central Government in case of long term capital gain, and expenditure incurred wholly and exclusively in connection with such transfer.
Under the provisions of Section 94(7) of the Act, loss arising on acquisition/sale/transfer of Units, which are acquired/ sold/ transfers within three months prior/after the record date (i.e. the date fixed by the Mutual Fund for the purposes of entitlement of the Unit holders to receive the income or additional units without any consideration, as the case may be) and sold within nine months after the record date, shall be ignored for the purpose of computing income chargeable to tax to the extent of exempt income received or receivable on such Units. Under the provisions of Section 94(8) of the Act, when units are bought within a period of 3 months prior to the record date for allotment of additional units and additional units are allotted without any payment and where the original units are sold within nine months after the record date, while the additional units (whether all or some of them) are continued to be held by the unit holder, the loss, if any, arising on sale of such units bought shall be ignored for the purpose of computing income chargeable to tax and such loss shall be treated as the cost of acquisition of the additional units.
Foreign Institutional Investors
Long-term capital gains on sale of Units, other than units of an equity oriented fund referred to above, would be taxed at the rate of 20% under Section 115AD of the Act. Such gains would be calculated without indexation of cost of acquisition. Short-term capital gains on sale of units of an equity-oriented fund arising after 1 October 2004, would also be taxable under Section 111A of the Act, at the rate of 10% if the sale of such units chargeable to securities transaction tax. Other short-term Capital gains would be taxed at the rate of 30% (subject to the Concessional rate of tax provided for in Section 111A of the Act, Discussed elsewhere in this Statement). The above tax rates would be increased by applicable surcharge, in case of, non-corporate Unit holders, at the rate of 10% thereof, Where their income exceeds Rs.10,00,000/- and at the rate of 10% thereof in case of all corporate Unit holders.
In all cases, Additional surcharge at 2%, called Education Cess, will be levied on the aggregate of tax and applicable surcharge, so calculated. In respect of long term capital gains on sale/redemption of units of any equity oriented mutual fund would be tax free in the hands of the NRI investor and therefore, the question of deducting any tax at source does not arise. In any case, even the table of rates Specifically excludes long term capital gains exempt under section 10(38). Therefore, TAML or the Mutual Fund, as the case may be, need not deduct any tax at source while remitting money to any NRI at the time of redemption of units of any equity oriented mutual fund if the same are held by the NRI for more than 12 months i.e. if they are long term capital assets in the hands of the NRI. In respect of the capital gains arising to an NRI from the sale of units of non equity oriented funds (such as debt funds), the position has not changed as compared to the position prevailing before
1st October, 2004.
Therefore, the short term capital gains arising from such units would continue to be taxed at par with normal income of the NRI. In such cases, therefore, The Mutual Fund or the AMC would have to deduct tax at source @ 30% (plus surcharge and education cess). Similarly, long term Capital gains arising from such units would also continue to be Taxed @ 20% and therefore, the rate at which tax is to be deducted at source from such capital gains would also be 20% (plus Surcharge and education cess)
Other Unit holders
Long-term capital gains in respect of Units, other than units of an Equity oriented fund referred to above, held for a period of more Than twelve months, will be chargeable under Section 112 of the Act, at concessional rate of tax, at the rate of 20%, as increased by the applicable surcharge. An additional surcharge at the rate of 2%, called Education Cess, on the aggregate of tax and Surcharge is to be levied under the Finance Act. In case of Resident Individuals and Hindu Undivided Families, where taxable Income, as reduced by long-term capital gains, is below the basic Exemption limit, the long-term capital gains will be reduced to The extent of the shortfall and only the balance long term capital Gains will be subjected to the flat rate of income tax (plus applicable Surcharge and education cess).
However, where the tax payable On such long-term capital gains, computed before indexation, Exceeds 10%, as increased by the applicable surcharge and Additional surcharge, being Education Cess, as provided by the Finance Act, of the amount of capital gains, such excess tax Shall not be payable by the unit holder. Short-term capital gains in respect of all Units, held for a period of not more than twelve Months, will be aggregated with other income and taxed at rates Of tax, including surcharge, applicable to normal income. However Section 111A, provides that such gains, in respect of equity Oriented fund, will be taxable only at 10% as increased by the
Applicable surcharges, if such gains arise after
1st October, 2004, and the sale of unit has been chargeable to the securities transaction tax.
Tax Deduction at Source
Domestic Unit holders
No income tax is deductible at source from income by way of Capital gains under the present provisions of the Act However, The provisions of section 195 of the Act may apply to non-residents (Other than Foreign Institutional Investors and long-term Capital gains exempt under section 10(38) of the Act).
Foreign Institutional Investors
Under Section 196D of the Act, no deduction shall be made from
Any income by way of capital gains, in respect of transfer of
Securities referred to in Section 115AD of the Act.
Other Non-resident Unit holders
Part II of the First Schedule to the Act, provides for deduction of tax at source from taxable capital gains at the rate of 20%, where they relate to long-term capital gains unless a lower withholding tax certificate is obtained from the tax authorities, and at the Marginal rates, viz. at 30% in case of non-corporate Unit holders Unless a lower withholding tax certificate is obtained from the tax Authorities, and at the rate of 40% unless a lower withholding tax Certificate is obtained from the tax authorities, in case of foreign Corporate Unit holders, in case of short-term capital gains.
Surcharge on income-tax will be levied at the rate of 10%, on such tax, in respect of non-corporate Unit holders, where their income exceed Rs.10,00,000/- and at the rate of 10% thereof in case of all corporate Unit holders. An additional surcharge at the rate of 2% is also to be levied under the Finance Act in all cases on the aggregate of tax and surcharge, so calculated.
Deduction under section 80C
As per the Act, section 80C is inserted from the financial year commencing on and from
April 01, 2005. As per the section, subject to the provisions, an individual/HUF is entitled to a deduction from Gross Total Income unto Rs. 1, 00,000/- (along with other prescribed investments) for amounts invested in any units of a mutual fund notified under section 10(23D) of the Act, under any plan formulated in accordance with such scheme as the Central Government may notify.
Securities Transaction Tax
All Unit holders
As per Chapter VII of the Finance (No. 2) Act, 2004 pertaining to STT as amended by the Finance Act, 2005,, the STT shall be payable by the seller at the rate of 0.20 per cent on the sale of a unit of an equity-oriented fund to the mutual fund. The Finance Act 2006 has increased the rate from 0.20% to 0.25% with effect from
1st June, 2006.
Investments in Units of the Mutual Fund will rank as an eligible form of investment under Section 11(5) of the Act read with Rule 17C of the Income Tax Rules, 1962, for Religious and Charitable Trusts.
Tax Treaty Benefits
An investor has an option to be governed by the provisions of the Act or the provisions of a Tax Treaty that India has entered into with another country of which the investor is a tax resident, whichever is more beneficial.
Units held under the Schemes of the Fund are not treated as assets as defined under Section 2(ea) of the Wealth Tax Act, 1957 and therefore would not be liable to wealth tax.
The Gift-tax Act, 1958, has ceased to apply to gifts made on or after
1 October 1998. Gifts of Units, purchased under the Schemes, would therefore, be exempt from gift tax.
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