Treatment of income from uti mutual fund investment

Hello,

The income from units of UTI will be exempt from tax as per Section 10(35) of the Act.

The brief of the section is as under:

 

(Incomes not included in total income.

10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included:

(35) any income by way of,—

(a) income received in respect of the units of a Mutual Fund specified under clause (23D); or

(b) income received in respect of units from the Administrator of the specified undertaking; or

(c) income received in respect of units from the specified company:

Provided that this clause shall not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified company or of a mutual fund, as the case may be.

Explanation.—For the purposes of this clause,—

(a) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)36;

(b) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)36;)

 

 

Sec 10 (35) Itself it is very broad section about income from mutual fund.
Although in short in your case, income from mutual fund will be exempt for long term investors, if mutual fund scheme is equity oriented fund. And if it is debt oriented fund it will be taxable u/S 48 capital gain tax.
So ask once to your agent, and if it is equity oriented then you will be eligible to claim exemption u/s 10 (35).

Can you explain the exemptions under Section 10(35) of the act?

Income from uti after 01-04-20 is taxable. Previous exemption is withdrawn

why was the exemption withdrawn?