SEC 80C

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2010 Hi,

I have invested 75000 in notified mutual funds which qualify for deduction under sec 80 C.I will recieve around 115000 on maturity i.e. after 3 years.

Is there any tax on maturity on additional value i.e 115000-750000=400000?

Similarly i have invested in FD for 5 years qualifies for sec 80c investment, is there any tax implication on maturity?

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)

10 April 2010 1)Long-term capital gains arising on the transfer of units of an ‘equity oriented’ mutual fund is exempt from income tax, if the Securities Transaction Tax (STT) is paid on this transaction i.e., the transfer of such units should be made through a recognised stock exchange in India (or such units should be repurchased by the relevant mutual fund). ‘Equity oriented’ mutual fund means a fund where the investible corpus is invested by way of equity shares in Indian companies to the extent of more than 65% of the total proceeds of the fund. Short-term capital gains arising on such transactions are taxable at a base rate of 15% (increased by surcharge as applicable, education cess of 2% and secondary and higher education cess of 1%). If a transaction is not covered by STT, the long-term capital gain tax rate would be 10% without indexation or 20% with indexation, depending on which the assessee opts for. Short-term capital gains on such transactions are taxable at normal rates.

2) Interest accrued on FD on each year should be considered as income from other sources.
In the year of receipt, interest pertaining to that year will be taxable under the head income from other sources.