Tax implications on sale of mutual funds

This query is : Resolved

CA Vivek Dugar (Querist)
Follow

13 June 2014 Dear Experts
Please tell the tax implications in case of sale of mutual funds which is under daily dividend reinvestment plan and sale is done within 12months of purchases?

Will there be any short term profit, as the difference in sale and purchase price is the dividend earned during the holding? [NAV is same during the whole period of holding]
Or
The difference will be shown in exempt income under the head "Income form other sources" as dividend received is exempt

CA UMESH DULAL

CA UMESH DULAL (Expert)
Follow

13 June 2014 Dividend received by you is exempted.
In case of redemption of MF units before 12 months, you have to pay short term capital gain.

CA Vivek Dugar

CA Vivek Dugar (Querist)
Follow

13 June 2014 Thank u sir for replying.

But in my case, dividend is earned in mutual funds but not receive in bank as it is dividend reinvestment plan and now on redemption, the redemption value = cost +dividend earned.

I am confuse, as whether there will be any short term capital gain or there will no gain/loss as difference in amount received and invested is dividend.

Kindly help

CA UMESH DULAL

CA UMESH DULAL (Expert)
Follow

13 June 2014 During the time of re-investment of dividend, you do not have to pay tax as it is exempted but during the time of sale of you have to pay tax.

calculate separately for each allotment to decide whether it is short term or long term.
less than 12 months-short term
other case -long term

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

vinod

sandhya.v

Suneel Shah

NICKOONJ VANANI

CA.K.RAMAKRISHNA. PRABHU

Subscribe Now

Tax implications on sale of mutual funds

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

CA Final

Article Assistant

Accountant

GST CONSULTANT

GST CONSULTANCY