Tax Treatment

POSTED BY Aditya ON September 25, 2010 1:04 pm COMMENTS (3)

Dear Sir,

(1) After destatementisation of Mutual Fund Units, One can hold mutual fund units in DMAT account. Whether on redeemtion of these units brokerage charges, STT and NSE/BSE transaction charges are applicable as per schedule of charges of broker?

(2) If DMAT account is joint and first holder is out of income tax bracket, Whehter short term / long term capital gain earned from the stocks of this account is added in the income of the 2nd account holder? what would be the tax treatment in this case?

(3) What are taxes applicable to Gold ETFs?

(4) On existence of DTC in April-2012, what would be the future of ELSS? What is your view in this regards,

Regards,

Aditya

 

3 replies on this article “Tax Treatment”

  1. Manickkam & Rakesh

    Golf ETF’s are not treated same as Equity , thats wrong

    Tax on GOLD ETF is as follows

    – Short term capital gain : before 1 yr -> added to income and taxed at applicable rates
    – Long term capital gains : after 1 yrs -> Taxed at 20% after indexation or 10% without indexation .

    ELSS will be out of 80C from 2012 , so we still have 2 yrs to go 🙂

    Manish

  2. manickkam says:

    1. Exit Load will be applicable based on the fund you have chosen and the period you are holding. When you are holding for more than a year, there are very almost no funds that charge you exit load. Nevertheless, there might be exit load, if you exit before it. You can see the http://valueresearchonline.com/ fund card for that specific fund to get the full details of the fund.

    2. Say, If he 2nd account holder was getting 1.4L and after adding this income if he comes into the tax bracket, then he has to pay for that amount that has come into the tax bracket alone. Otherwise, there will be no tax for him. But it would be better to file the tax returns, even though he is having no tax.

    3. Gold ETFs are similar to any other capital instrument and taxed in the same manner. It will be considered similar to a stock as it is traded in the stock exchange. Long term profit/loss will be ignored. Short term profit is taxable. Short term loss can be set off/carried forward.

    4. ELSS has been removed for 80C and it cannot enjoy the tax benefits. It will acts as a close-ended mutual fund and you can invest in it if you find better returns in it.

  3. rakesh says:

    Aditya,

    1. Exit load will be applicable if you redeem before the expiry period, varies from 6 months to 1 year from fund to fund. STT will be applicable. Whenever i have redeemed MF online only STT is applicable, transaction charges are not.
    2. It would be treated as income for the 2nd account holder and he will have to show it while filing returns.
    3. Gold ETFs will be taxed similar to other instruments. The fund also charges 1-2% as maintenance charges.
    4. ELSS will be out of DTC in April, 2012. But we should continue to invest in the same, not because of tax benefit but for returns. Their returns are very good.

    Rakesh

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