RNI,SEBI have recently introduced the transfer of mutual funds online including gifting.
Fund houses are saying there will report this as redemption. Articles online say no tax as it is a gift.
I think IT dept should send out a circular reg this as non taxable else purpose of introducing this scheme is lost.
I might as well sell and pay LTCG and then gift.
anyone who has transferred MF shares to relatives can confirm if tax was paid
Thanks
So RNI and SEBI have introduced online transfer of mutual funds, including gifting. Fund houses are saying they will report this as redemption, but articles online say there is no tax since it is a gift. You are wondering if the IT dept. should clarify this via a circular to confirm it is non-taxable , otherwise the purpose of this scheme is kind lost. You are also thinking maybe you would end up paying LTCG and then gift.
Blood relation no tax sec 56(x) 2
Blood relation no tax sec 56(x) 2
All these are very general responses to a particular aspect of a scheme to transfer Mutual funds in SOA format not demat to relatives. However if you transfer SOA funds the fund houses say it will be reported as redemption even though the transfer reason says gifting.That means IT will tax the redemption LTCG though it is a gift. I AM SAYING INCOME TAX DEPT SHOULD STEP IN AND CLARIFY THAT THE TRANSFER IS TAX EXEMPT AND NOT TO BE CONSIDERED AS REDEMPTION. I AM SURPRISED IT DEPT ,SEBI,RBI WHICH INTRODUCED THIS SCHEME OF TRANSFER OF MUTUAL FUNDS USING CAMS OR CVL OR FUND HOUSES DID NOT BOTHER AND GO INTO THE DETAILS AND IT CALLED REDEMPTION. IT SHOULD INTRODUCE A CLAUSE SAYING IT IS NOT REDEMPTION AND HELP FUND HOLDERS TRNSFER MUTUAL FUNDS USING SAY CAMSONLINE AS A GIFT AND THATS WHAT IT IS. WHY IT DEPT IS SLEEPING IN DONT UNDERSTAND. ONE MAY AS WELL SELL THE FUNDS,PAY LTCG AND TRANSFER THE PROCEEDS TO RELATIVES AND THE RESULTS ARE THE SAME. THE PURPOSE OF INTRODUCING THIS SCHEME WAS TO HELP PEOPLE HOLD MFs to transfer to relatives tax free.
i understand the funds should be converted to demat form to enable transfer tax free off line. why this unnecessary hassle FOR PEOPLE HO.DING MFs. IS THE OBJECT OF THE SCHEME INTRODUCED BY SEBI, RBI THAT SOA TYPE MFs can be TRANSFERRED TO RELATIVES IS A GIMMICK OTHERWISE. THEY DONT SEE THE IMPLICATIONS.MANY ARE CONCERNED ABOUT CONVERTING THEIR MF FOLIO INTO DEMAT FORM AS THEY ARE HAPPY AS SUCH WITH SOA FORMAT.
SO IT DEPT, PL STEP IN AND CLARIFY WHY YOU ARE MAKING SIMPLE THINGS COMPLICATED??
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