Hey @Jay_Tanna,
The Finance Minister has introduced a new Section 194K in Budget 2020. Sec 194K was applicable on or after 1st April 2020.
As per Income Tax Act, Sec 194K mentions TDS on ‘Income’ from Mutual Funds leading to a confusion if TDS was required to be deducted on Capital Gains on Sale of Mutual Funds also.
CBDT issued an official clarification on 4th Feb 2020. It clarified that TDS should be deducted at 10% on Dividend Income only and not on Capital Gains from the sale of mutual funds. Thus, Sec 194K is applicable as follows:
Sec 194K - AMC paying dividend on equity mutual funds should deduct TDS at 10% if the dividend exceeds INR 5,000.
Read more here -
Team - please can you help clarify if cash investments are allowed in mutual funds through banks or other intermediaries? If yes are there any limits per financial year?
Hi @aniruddha_41, you can make cash investments of upto Rs. 50,000 by visiting a bank, AMC offices or other Mutual Fund Distributors. But please keep in mind that whatever returns you get with the mutual fund will only be paid in your bank account.
I bought mutual funds units in Sept 2019 which I sold in March 2020. What will be it’s tax treatment?
Hey Laxmi,
Capital Gain treatment on the sale of mutual funds depends upon the period of its holding.
If the period of holding is for more than 12 months then Long term Capital Gain will arise otherwise gain will be short term Capital gain.
And since your holding period is less than 12 months, it will be treated as short term capital gains and will be taxed at 15%.
I am salaried person and have Zerodha equity delivery account and invest in short term only and now i am going to fill ITR of FY 2021-22 but I am confused about one thing that what will be my capital gain.
When i checked the tax p&l statement of kite app of zerodha then there is 43,454 short term profit showing but my CA is calculating capital gain from AIS statement of income tax website actually there are two options given 1. Sale of securities and units of mutual fund 2. Purchase of securities and units of mutual fund. He is subtracting " Sale of securities and units of mutual fund - Purchase of securities and units of mutual fund = capital gain (79000).
Q1. Which amount will be capital gain: 43454 or 79000 ?
Q2. I do not invest in Mutual Fund then why mutual fund word is coming in AIS statement on IT portal.
I am facing the same issue.
do mutual fund deduct TDS on redemption of growth plan fund ?
@Ridhima_Sharma
@Yash_Kaviya
Hi @HIREiN,
No, the TDS is not applicable on the redemption of the growth plan fund. But applicable in case of dividends.
How to calculate LTCG arising out of monthly SIP in mutual funds (with direct plan, growth option ) on selling them? Is each months SIP capital gains has to be taken into account or total capital gains in financial year ?
And if answer is former, Is there any calculator to calculate such capital gains tax on monthly SIP.
Whenever you’ve had a sale transaction, ie, each month’s SIP capital gain/loss has to be taken into account on the FIFO method.
You can Store | Quicko Pro for any further guidance.