Arun Jaitley revealed a few proposals that will affect the mutual funds (MF) industry. Here are the relevant proposals
a) To amend the provisions of the Income Tax Act
so as to provide tax neutrality on transfer of units of a scheme of a mutual fund
under the process of consolidation of schemes of MFs as per Sebi Regulations, 1996.
b) To levy a surcharge
@12% as against current rate of 10% on additional income-tax payable by companies on distribution of dividends and buyback of shares, or by mutual funds and securitisation trusts on distribution of income.
c) Exemptions are being withdrawn on the following services:
- distributor to an MF
Read our full coverage on Union Budget
d) Services provided by mutual fund
agents, mutual fund
distributors and lottery agents are being brought to under reverse charge consequent to withdrawal of exemption on such services.