Taxes for Mutual Fund Distributor

POSTED BY Yogesh K ON January 4, 2013 6:00 pm COMMENTS (2)

1) How income tax is calculated on income earned as transaction commission by mutual fund distributor?

2) Which ITR to be filled for such income?

3) Whether service tax is applicable on such income?

2 replies on this article “Taxes for Mutual Fund Distributor”

  1. Yogesh K says:

    Thanks Ashal for your response.
    Let me be very specific. My wife was working till 2008 and till that time she was filing Tax-Return and her income was in 10% tax slab that time . Then she left the job and her income was only bank interest till 2012, so she did not fill Tax-Return file. In 2012 she took HDFC mutual fund distributorship. Well, she is not interested in starting it as business but whatever investment I am doing in mutual funds, I will do through her. In 2012 she also did some shares transactions in her DEMAT account.
    Her total income is now sum of bank interest (not more than 5000), commission on mutual funds as distributor (not more than 2500) and shares transactions (not more than 5000) . Thus total income is not more than 12500. But for 2012-13 financial year, I want to file her tax returns. My all above 3 questions are related to this. So request you to answer in this context.

    Regards,

    Yogesh

  2. Dear Yogesh, I’m trying to answer your queries.

    1. the net income is taxable i.e. total commission earned – expenses towards your business at the slab rate as applicable to you.

    2. ITR-3 if you are doing the business under a prop. concern, ITR-4 for normal business reporting.

    3. Yes if your income is more than the zero service tax limit, ST is applicable. please check Service Tax rules for more details.

    thanks

    Ashal

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