This summary of tax implications is based on the current provisions of the applicable tax laws. This information is provided for general purpose only. In view of the individual nature of tax implications, investors are advised to refer the provisions of the Income-Tax Act and/or consult their investment/tax advisor with respect to the specific tax implications arising out of an investment in the scheme.
- Income of Sundaram Mutual Fund: Exempt from tax
- Dividend distribution: Tax free
- Long-term capital gains (units held for more than 12 months qualify): Tax free.
- Short-term capital gains (units held for less than 12 months qualify): 15%
- Units of the Scheme are subject to lock-in period of three years.
- Securities Transaction Tax: Payable at 0.001% on the value of units sold.
- Tax deduction at source: Not applicable for persons resident in India; TDS applies on redemption proceeds payable to NRIs/FIIs.
- Wealth tax/Gift Tax: Not payable
- Investment upto Rs.1,50,000/- made by Individual / HUF (along with other prescribed investments) will only qualify for deduction from the gross total income under Section 80 C of the Income Tax Act, 1961 as per current tax laws.
- The units under the Scheme is offered to the Investors for enabling them to avail the benefits under clause (xiii) of Sub-section (2) of Section 80C of the Income-tax Act, 1961 (the “Act”) read with “Equity Linked Saving Scheme, 2005” notified by notification No SO-1563 (E) dated 03/11/2005. Section 80C(2)(xiii) inter alia, provides as follows:
“xiii) as subscription to any units of any Mutual Fund referred to in clause (23D) of section 10 or from the administrator or the specified company under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf”
In addition to Income tax, surcharge (on income tax) and cess (on total tax) will apply for companies and only cess will apply for others. The surcharge on income
tax is payable by companies if their Total income exceeds Rs 1 crore and the rate will be 5% for Indian Companies and 2% for foreign Companies. Cess will be
payable at 3% of total tax.
Investors should also refer to the Statement of Additional Information available at www.sundarammutual.com for more but not exhaustive detail.