For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

TDS Only Applicable On Mutual Fund Dividends And Not On Gains On Redemption

By Staff
|

On Tuesday, the Central Board of Direct Taxes (CBDT) clarified that the Union Budget proposal of 10 percent TDS (tax deducted at source) will only be applicable on dividend payment by mutual funds and not on gains arising from redemption of its units.

TDS Only Applicable On Mutual Fund Dividends And Not On Gains On Redemption
 

On 1 February, Finance Minister Nirmala Sitharaman in her Budget speech said that dividend distribution tax (DDT) paid by companies and mutual funds on dividend paid to shareholders or unitholders would be removed. It was instead, proposed to levy TDS at 10 percent on dividend/income paid by a company or mutual fund to its share/unitholder if the amount of such dividend/income exceeds Rs 5,000 in a year.

Following many queries that were raised from this change, the CBDT said, "It is hereby clarified that under the proposed section, a mutual fund shall be required to deduct TDS at 10 percent only on dividend payment & no tax shall be required to be deducted by the mutual fund on income which is in the nature of capital gains."

"Necessary clarification, if required, shall be proposed in the relevant provision of the law," it added.

Read more about: tds mutual funds dividends ddt
Story first published: Wednesday, February 5, 2020, 10:57 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more