Tax Reckoner 2011-12

Snapshot of Tax rates specific to Mutual Funds
These rates are subject to enactment of the Finance Bill 2011. The rates are for the Financial Year 2011-12.
 
1. Income Tax Rates
 
For Individuals, Hindu Undivided Families, Association of Persons and Body of Individuals
Total Income Tax Rates
Up to Rs. 180,000 (a)(b) NIL
Rs. 180,001 to Rs. 500,000 10%
Rs. 500,001 to Rs. 800,000 20%
Rs. 800,001 and above (c) 30%

(a) In the case of a resident woman below the age of sixty years, the basic exemption limit is Rs. 190,000
(b) In the case of a resident individual of the age of sixty years or above but less than eighty years, the basic exemption limit is Rs. 250,000
(c) In the case of a resident individual of the age of eighty years or above, the basic exemption limit is Rs 500,000
(d) Surcharge is not applicable, education cess of 3% on income-tax is levied
(e) Marginal relief may be available.

 
 
2. Securities Transaction Tax (STT)
 
STT is levied on the value of taxable securities transactions as under :
Transaction Rates Payable By
Purchase/ sale of equity share or a units of equity oriented fund (delivery based) 0.125% Purchaser /Seller
Sale of equity shares, units of equity oriented mutual fund (non–delivery based) 0.025% Seller
Sale of futures and options in securities 0.017% Seller
Sale of an option in securities, where option is exercised 0.125% Purchaser
Sale of unit of an equity oriented fund to the Mutual Fund 0.25% Seller
 
 
3. Capital Gains
Particulars Short-term capital gains tax rates (a) Long-term capital gains tax rates (a)
Sale transactions of equity shares / unit of an equity oriented fund which attract STT 15% Nil
Sale transaction other than mentioned above:    
Individuals (resident and non-residents) Progressive slab rates 20% with indexation; 10% without indexation (for units/ zero coupon bonds)
Firms including LLP (resident and non-resident) 30%
Resident Companies 30%
Overseas financial organisations specified in section 115AB 40% (corporate) 30% (non-corporate) 10%
FIIs 30% 10%
Other Foreign companies 40% 20% / 10%
Local authority 30% 10% without indexation (for units/ zero coupon bonds) / 20% (for others)
Co-operative society Progressive slab rates
 
(a) These rates will fur ther increase by applicable surcharge & education cess.
 
 
4. Dividend Stripping
The loss due to sale of units in the schemes (where dividend is tax free) will not be available for setoff to the extent of the tax free dividend declared; if units are: (A) bought within three months prior to the record date fixed for dividend declaration; and (B) sold within nine months after the record date fixed for dividend declaration.
 
 
5. Bonus Stripping
The loss due to sale of original units in the schemes, where bonus Units are issued, will not be available for set off; if original units are: (A) bought within three months prior to the record date fixed for allotment of bonus units; and (B) sold within nine months after the record date fixed for allotment of bonus units. However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units.
 
 
Personal Tax Scenarios
 
Individual Income Level
500,000 1,000,000 1,500,000
Tax in FY 2010-11 35,020 158,620 313,120
Tax in FY 2011-12 32.960 156,560 311,060
Effective Tax Savings 2,060 2,060 2,060
Effective Tax Savings (%) 5.88% 1.30% 0.66%
 
Resident women below 60 years Income Level
500,000 1,000,000 1,500,000
Tax in FY 2010-11 31.930 155.530 310.030
Tax in FY 2011-12 31,930 155,530 310,030
Effective Tax Savings Nil Nil Nil
Effective Tax Savings (%) 0% 0% 0%
 
Resident senior citizen above 60 years (earlier 65 years) Income Level
500,000 1,000,000 1,500,000
Tax in FY 2010-11 26,780 150,380 304,880
Tax in FY 2011-12 25,750 149,350 303,850
Effective Tax Savings 1,030 1,030 1,030
Effective Tax Savings (%) 3.85% 0.68% 0.34%
 
Resident senior citizen above 80 years Income Level
500,000 1,000,000 1,500,000
Tax in FY 2010-11 26,780 150,380 304,880
Tax in FY 2011-12 Nil 123,600 278,100
Effective Tax Savings 26,780 26,780 26,780
Effective Tax Savings (%) 100% 17.81% 8.78%
 
 
Tax Implication on Dividend recieved by unit holders  
  Individual/ HUF Domestic company NRI*
Dividend
Equity oriented schemes Nil Nil Nil
Other than equity oriented schemes Nil Nil Nil
 
Tax on distributed income (payable by the scheme) rates effective from 1 June 2011
Equity oriented schemes ** Nil Nil Nil
Other schemes 12.5% + 5% surcharge + 3% education cess 30% + 5% surcharge + 3% education cess 12.5% + 5% surcharge + 3% education cess
Money market and Liquid schemes 25% + 5% surchange + 3% education cess 30% + 5% surchange + 3% education cess 25% + 5% surchange + 3% education cess
 
Capital Gain Taxation
Long Term Capital Gains (Units held for more than 12 months)
Equity oriented schemes ** Nil Nil Nil
Other than equity oriented schemes The unitholder has an option to pay tax @ 10% without indexation or 20% with indexation, whichever is beneficial
-Without indexation 10% 10% 10%
-With indexation 20% 20% 20%
 
Short Term Capital Gains (Units held for 12 months or less)
Equity oriented schemes ** 15% 15% 15%
Other than equity oriented schemes 30% 30% 30%
* The short term/ long term capital gains tax will be deducted at the time of redemption of units in case of NRI investors only.
** Securities Transaction Tax (STT) @ 0.25% will be deducted on equity funds at the time of redemption and switch to the other schemes.
Mutual Fund would also pay STT wherever applicable on the securities bought/ sold.
^On the assumption that the investor is taxed under the highest tax bracket.
The above rates will further increase by applicable surcharge and education cess.
 
Tax Deducted at Source (Applicable only to NRI Investors)
  Short term capital gains Long term capital gains
Equity oriented schemes 15% NIL
Other than equity oriented schemes 30% 20% (#)
# after providing for indexation
 
Mutual Fund investments are subject to market risks, read the scheme information document carefully before investing.
 
Disclaimer : The information set out above is included for general information purposes only & does not constitute legal or tax advice. In view of the individual nature of the tax consequences, each investor is advised to consult his or her own tax consultant with respect to specific tax implications arising out of their par ticipation in the Scheme. Income Tax benefits to the mutual fund & to the unitholder is in accordance with the prevailing tax laws as cer tified by the mutual funds tax consultant. Any action taken by you on the basis of the information contained herein is your responsibility alone. We will not be liable in any manner for the consequences of such action taken by you. The information contained herein is not intended as an offer or solicitation for the purchase and sales of any schemes.