Sir
Partnership Firm has invested in Mutual Fund and received dividend up to Rs 3lac. and same mutual fund are sold.
1) What is the Taxation of Dividend ( Taxable or Exempt ) ?
2) What is the Taxation of sale of Mutual Fund and what cost to be taken in case of Dividend reinvestment .
Any income arising from mutual fund is exempt from tax as per section 10(35) of Income Tax Act'1961. However, Capital gain arising transfer of mutual fund:
In case of long term capital gain (held more than 12 months) shall be exempt from tax as per section 10(38) of Income Tax Act,1961
In case of short term capital gain (other than long term) shall be taxable at normal rates.
In case of dividend re-investment from the date of re-investment to date of sale , if it short term shall be liable to tax otherwise exempted.
CAclubindia
