What are the Tax benefits available in a mutual fund ?

Mutual Funds are tax efficient avenues, for example

• 
  
  Dividend income received from the Mutual Fund is exempt from tax in the hands of unit holder.


• 
  
  No tax is deducted at source for dividend income credited or paid by funds to its unit holders.


• 
  
  No tax is deducted on capital gains in case of redemptions made by resident unit holders.


• 
  
  The income earned by a mutual fund is exempt from tax, however, in certain cases, the income so distributed to unit holders is liable for dividend distribution tax.


• 
  
  In case of an individual or HUF, investment of up to Rs. 1 lakh can be claimed as income deduction while calculating the taxable income, if the same is invested in Equity Linked Savings Schemes (ELSSs).

Note : The information on tax provided below is based on the mutual fund's understanding of the tax Laws as of date. In view of the individual nature of tax consequences, each investor is advised to consult his or her own tax adviser with respect to the specific tax consequences to him or her of participation in the scheme.

Tax rates for Financial Year 2011-12

Tax Implication on Dividend

	Resident Individual/HUF	Domestic Corporates	NRI**
Equity schemes
Equity schemes	Tax free	Tax free	Tax free
Debt schemes	Tax free	Tax free	Tax free

Dividend Distribution Tax (Payable by the Scheme) prior to May 31, 2011
Equity Schemes*	Nil	Nil	Nil
Debt schemes	12.5%+5% Surcharge+3% Cess	20%+5% Surcharge+3% Cess	12.5%+5% Surcharge+3% Cess
	=13.519%	=21.63%	=13.519%
Money Market & Liquid Schemes	25%+5% Surcharge+3% Cess	25%+5% Surcharge+3% Cess	25%%+5% Surcharge+3% Cess
	=27.0375%	=27.0375%	=27.0375%

Dividend Distribution Tax (Payable by the Scheme) with effect from June 1, 2011
Equity Schemes*	Nil	Nil	Nil
Debt schemes	12.5%+5% Surcharge+3% Cess	30%+5% Surcharge+3% Cess	12.5%+5% Surcharge+3% Cess
	=13.519%	=32.445%	=13.519%
Money Market & Liquid Schemes	25%+5% Surcharge+3% Cess	30%+5% Surcharge+3% Cess	25%%+5% Surcharge+3% Cess
	=27.0375%	=32.445%	=27.0375%

Capital Gain Taxation

Dividend Distribution Tax (Payable by the Scheme) with effect from June 1, 2011
Equity Schemes*	Nil	Nil	Nil
Debt Schemes	10% without indexation or 20% with indexation which ever is lower + 3% Cess	10% without indexation or 20% with indexation which ever is lower + 5% Surcharge # + 3% Cess	10% without indexation or 20% with indexation which ever is lower + 3% Cess***
Without Indexation	=10.300%	=10.815%	=10.300%
With Indexation	=20.600%	=21.63%	=20.600%

Short Term Capital Gains (Units held for less than 12 months)
Equity Schemes*	15% + 3% Cess	15% +5% Surcharge # + 3% Cess	15% + 3% Cess##
	=15.450%	=16.223%	=15.450%
Debt Schemes	30% + 3% Cess ^	30% +5% Surcharge # + 3% Cess	30% + 3% Cess ^
	=30.900%	=32.445%	=30.900%

Tax deducted at source pertaining to NRI Investors
	Short Term Capital Gain	Long Term Capital Gain
Equity	15.450% ##	Nil
Debt	30.900%	20.60%@

Download Section 80CCF Tax Saving IDFC Infrastructure Bonds Application Form

https://sites.google.com/site/infrabondapplications/home/IDFC-Infrastructure-Bond-Application-Forms

Download Section 80CCF Tax Saving L&T Infrastructure Bonds Application Form

https://sites.google.com/site/infrabondapplications/home/l-t-long-term-infrastructure-bond-for-year-2011---2012

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