Do we have to pay income tax on elss mutual fund returns

Tax queries 516 views 3 replies

gekco

B.Com

170 Points Posted on 16 April 2015

Hello , I have made a profit of rs 45,000 on my ELSS mutual funds. I have read lot of articles on Interrnet and found that there is no tax on returns from ELSS mutual funds . But my accountant is saying that I will have to add this profit in my total income of financial year and pay the "normal" income tax on it. Can anyone please guide which is the correct method.

I have also invested in Equity Mutual Funds 2 years ago and want to redeem them now . Since, there is no long term capital gain tax on Equity mututal funds . Do I have to add profit from these mututal funds to my total income and pay income tax on it.

Replies (3)

anubhav

article

28 Points Posted on 17 April 2015

Mutual fund (MF) and Equity-linked savings scheme (ELSS): Subscripttion to MFs and ELSSs qualifies for deduction under Section 80C.Investment in ELSS has a lock-in period of 3 years. Pre-mature withdrawals is not allowed under any circumstance

Section 10(35) (a) of ITA states that any income received in respect of the units of mutual funds specified u/s 10(23D) of ITA is exempt from tax. As a result of this provision, the dividend received from equity mutual funds is exempt from tax

anubhav

article

28 Points Posted on 17 April 2015

gekco

B.Com

170 Points Posted on 21 April 2015

Hello Anubhav,

Can you please clear my doubt. I found another thread at - /forum/mutual-funds-and-sec-10-35--101005.asp where its written "Capital Gains Exemption Deals With under Section 10(38)." and you mentioned Sec 10(35) in your reply.

Can you please also answer , that if income from capital gains is taxable if total capital gain is more than 2,50,000 limit . I am not talking about Long term capital tax, I am selling them after 12 months only.

I hope i have explained my question clearly