Can any one explain what is the difference between section 10 (35) & 10 (23 D) since both these sections explains income from mutual fund is exempted.
shafas.m.n (student) (24 Points)
10 March 2017Can any one explain what is the difference between section 10 (35) & 10 (23 D) since both these sections explains income from mutual fund is exempted.
As per Finance Act, 2003 from the Assessment Year 2004-05, the dividend income from shares and income from units of Mutual Funds covered U/s 10(23D) would be completely exempt from income tax. The relevant sections areas follows
1.For dividend income from Indian company : Fully exempt from payment of income tax by the receiver as per section 10(34) as the company already paid the tax on its distributable profits.This exemption is allowed inorder to avoid double taxation. (but if the dividend is received from a foreign company the receiver is liable to pay tax.
Income from Mutual funds are exempt from Tax u/s 10(35)
shafas.m.n
(student)
(24 Points)
Replied 10 March 2017
Sanjay S
(Chartered Accountant)
(1375 Points)
Replied 10 March 2017
No. That is not it.
From what I understand:
Section 10(23D) = Exemption on Income OF Mutual Fund set up by banks or public companies. (For exempting income of Notified MF companies).
You may observe that it is through this section that the power to notify MFs have been conferred on the Central Government. The income of any MF which has not been so notified by CG, cannot claim exemption u/s 10(23D).
To get an idea of Notified MFs, Visit this link: https://www.incometaxindia.gov.in/Pages/utilities/Notified-Mutual-Fund.aspx
Section 10(35) = Exemption on Income FROM Mutual Fund investments (For exempting income of assessees from units held in MF). This income could take the nature of dividend, etc.
sambhav
(student)
(33 Points)
Replied 11 March 2017
tanveer hussain malik
(student)
(22 Points)
Replied 07 July 2017
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