Income-tax Act, 2025

Tax on income of investment fund and its unit holders. - Section 224

Tax on income of investment fund and its unit holders.

224. (1) Irrespective of anything contained in any other provision of this Act and subject to the provisions of this section, where a person, being a unit holder of an investment fund, out of investments made in the investment fund, receives any income or any income accrues or arises to him, such income shall be chargeable to income-tax in the same manner as if, it were the income accruing or arising to, or received by, such person, had the investments made by the investment fund been made directly by him.

(2) Where in any tax year, the net result of computation of total income of the investment fund, without giving effect to the provisions of Schedule V (Table: Sl. No. 1), is a loss under any head of income and such loss cannot be or is not wholly set off against income under any other head of income of the said tax year, then out of such loss,

(a) the loss arising to the investment fund as a result of the computation under the head "Profits and gains of business or profession", if any, shall be

(i) allowed to be carried forward and it shall be set off by the investment fund as per the provisions of Chapter VII; and

(ii) ignored for the purposes of sub-section (1);

(b) the loss other than the loss referred to in clause (a), if any, shall also be ignored for the purposes of sub-section (1), if such loss has arisen in respect of a unit which has not been held by the unit holder for at least twelve months.

(3) The loss other than the loss under the head "Profits and gains of business or profession", if any, accumulated at the level of investment fund as on the 31st March, 2019, shall be

(a) deemed to be the loss of a unit holder who held the unit on the 31st March, 2019 in respect of the investments made by him in the investment fund, in the same manner as provided in sub-section (1); and

(b) allowed to be carried forward by such unit .... To read the full section download the app from Google Play store