Taxation of Mutual Fund
This query is : Resolved
13 July 2010
Under Monthly Income Plan (MIP)of Mutual Fund, a person gets dividend on monthly basis depending on surplus position of the fund.The dividend received is exempted under section 10 of the Income Tax Act my query is:
if a person hold MIP for four month only and recived dividend in every month, would dividend stripping u/s 94(7)is applicable.
if a person hold MIP for four month only and recived dividend in every month, would dividend stripping u/s 94(7)is applicable.
13 July 2010
A classic case of dividend stripping.
The section reads
Where—
(a) any person buys or acquires any securities or unit within a period of three months prior to the record date;
[(b) such person sells or transfers—
(i) such securities within a period of three months after such date; or
(ii) such unit within a period of nine months after such date;]
(c) the dividend or income on such securities or unit received or receivable by such person is exempt,
then, the loss, if any, arising to him on account of such purchase and sale of securities or unit, to the extent such loss does not exceed the amount of dividend or income received or receivable on such securities or unit, shall be ignored for the purposes of computing his income chargeable to tax.]
So section 94(7) applicable in case of loss on sale of such units.
The section reads
Where—
(a) any person buys or acquires any securities or unit within a period of three months prior to the record date;
[(b) such person sells or transfers—
(i) such securities within a period of three months after such date; or
(ii) such unit within a period of nine months after such date;]
(c) the dividend or income on such securities or unit received or receivable by such person is exempt,
then, the loss, if any, arising to him on account of such purchase and sale of securities or unit, to the extent such loss does not exceed the amount of dividend or income received or receivable on such securities or unit, shall be ignored for the purposes of computing his income chargeable to tax.]
So section 94(7) applicable in case of loss on sale of such units.
13 July 2010
Thanks
13 July 2010
You are welcome.
U can also thank by clicking on the thank user icon below the name.
U can also thank by clicking on the thank user icon below the name.
14 July 2010
There is also a recent judgement from SC wrt Dividend stripping.
The judgement is in favour of the Assessee and against the Dept.
Kindly check the judiciary section for the same.
The judgement is in favour of the Assessee and against the Dept.
Kindly check the judiciary section for the same.
14 July 2010
Dear HARIHARAN KRISHNAMURTHY
The judgement of Walfort finance is before the introduction of section 94(7) and not after the inroduction of the section.
Kindly read the facts of the case and revert.
The judgement of Walfort finance is before the introduction of section 94(7) and not after the inroduction of the section.
Kindly read the facts of the case and revert.
15 July 2010
Dear Aditya
I agree with you. I was only referring to the judgement as it is also related to dividend stripping.
I agree with you. I was only referring to the judgement as it is also related to dividend stripping.
15 July 2010
Yes sir is agree it was related to dividend stripping but it is relevant before introduction of Section 94(7) and cases related before and not relevant in current times.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Applicability
- Is Aadhar PAN linking required for opening bank account?
- Where to show the RCM on Rent paid to unregistered landlord
- CPC Processing IT Return for AY 2023-24 without recognizing the Taxation Option under New Regime
- Application of 115BAC
- RCM - commercial rent paid to URP under GST
- Offsetting interest income against derivative trading losses
- TDS NUMBER SURRENDER
- GSTR-3B - Do I file nil when there is no sale but I've bought raw materials
- Legal heir raised refund , but refund issued to the closed account of deceased.
- Whether still royalty
- 20% OF DEMAND PAYMENT IN APPEAL
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding Resignation by Auditor from Pvt. Ltd.
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
