Section 94(7) covers those transactions where securities or units have been acquired or bought and transferred or sold. Actually mutual fund units are neither transferred nor sold. These are redeemed. Redeem as per Oxford dictionary is "repay (a stock, bond, etc.) or clear (a
debt)". Transfer involves change of hands.
In case of Mutual funds, no. of units keep of changing. Here, it can not be said, Authorised Share capital, Issued, Subscribed and so on. No. of units will keep on changing on day to day basis.
In view of above, I feel that section 94(7) is not applicable on mutual fund transations. View of others are solicited.
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MEANING OF REDEMPTION
Replies (1)
Your Ground appear to be sound.
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