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Taxation Aspects

Dividends
Dividends Individuals/HUF Corporates
Equity schemes Tax free Tax free
Debt schemes Tax free Tax free
Dividend Distribution Tax
Dividend Distribution Tax Individuals/HUF Corporates
Equity schemes Nil Nil
Debt schemes 14.163% 22.66%
Money market and Liquid schemes 28.325% 28.325%
Capital Gains Tax
Long Term Capital Gains Units held for more than 12 months
Short Term Captial Gains Units held for 12 months or less
Long Term Capital Gains Tax
Long Term Capital Gains Tax Individuals/HUF/Corporates
Equity schemes Nil
Debt schemes 10% without indexetion or 20% with indexetion whichever is lower
Short Term Capital Gains Tax
Short Term Capital Gains Tax Individuals/HUF/Corporates
Equity schemes 11.33% (10% Tax + 10% Surcharge + 3% Cess)
Debt schemes 33.99% (30% Tax + 10% Surcharge + 3% Cess)
Securities Transaction Tax
Securities Transaction Tax of 0.25% will be deducted by the Mutual Fund on redemption or switch from any equity oriented fund.
Wealth Tax
Mutual Fund units are not liable to Wealth Tax.
Tax Benefits u/s 80 C
The introduction of section 80C, in the Union Budget 2005, has allowed investors to save tax by investing in Equity Linked Savings Scheme (ELSS) schemes on investments upto Rs.1 Lac. and at the same time avail the growth potential of equity markets.

The following table draws a comparison of the investment avenues available under Section 80C

Investment
Options
Lock-in Time Period
(In Years)
Max
Investment
for Sec 80C Benefits
(Rs.)
% Return (CAGR) Tax
Treatment
of interest
ELSS (Mutual Fund Schemes under Equity: Tax Planning Category) 3 1,00,000 49.83 * Dividend and Capital Gains Tax Free
Public Providend Fund (PPF) 15 70,000 8 # Tax Free
National Savings Certificate (NSC) 6 1,00,000 8 # Taxable
* Equity Tax Planning Category average for 3 yrs, Source: Value Research Mutual Fund Performance Report 31 Oct , 2007
# Source: http://www.indiapost.gov.in/banking.html

Disclaimer

The information set forth below is based on the mutual fund’s understanding of the tax Laws as of date. In view of the individual nature of tax consequences, each investor is advised to consult his or her own tax adviser with respect to the specific tax consequences to him or her of participation in the scheme.

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