Ltcg on units of equity oriented fund in case of non resident
Shelly (student) (95 Points)
19 April 20182. if they can be unlisted, then whether they can be covered in sec 112(1)(c)(i)?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(171423 Points)
Replied 20 April 2018
1. It can be listed or otherwise
2. No
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(171423 Points)
Replied 20 April 2018
Equity oriented MF units cannot be sold in open market otherwise if listed.
So, either of its redemption or (LT) transfer attracted Sec. 10(38), and hence sec. 112 was not applicable (till AY 2018-19). But now From AY 2019-20 section 112A will be applicable.
Ajay
(CA Job)
(512 Points)
Replied 22 April 2018
1. Yes, Equity Oriented Mutual Fund can be unlisted. The best cue is to refer to the latest amendment u/s 112A of the Income Tax Act, 1962. The provisions have been made exclusively to determine Cost of Acquisition for the purpose of computing LTCG u/s 112A in respect of Equity Oriented Mutual Funds which are not listed (i.e. unlisted) on a recognized stock exchange as on 31.01.2018 (under Sec.55(2)(ac)).
2. In your question did you mean Sec.112(1)(c)(iii)?
Now, for Equity Oriented Mutual Fund (referred to as "EOMF" for our purpose)for a non-resident the position would be as under:
Thus, now, to analyze our situation:
The Non-Resident can take the benefit of Sec.112(1)(c)(iii) and LTCG on such transfer of unlisted EOMF will be taxed @ 10% with the following conditions while computing the LTCG:
Please correct me if I am wrong, anyone!
Regards
Ajay
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