Tax Reckoner 2023-2024
 
Snapshot of Tax rates specific to Mutual Funds
 
The rates are applicable for the financial year 2023-24 subject to the enactment of Finance Bill, 2023
 
 
 
1. Income Tax Rates
Option A
For Individuals, Hindu Undivided Family, Association of Persons, Body of
Individuals and Artificial juridical persons
 
Total Income Tax Rates
Up to Rs. 2,50,000 (a)(b) NIL
Rs. 2,50,001 to Rs. 5,00,000(d)(e) 5%
Rs. 5,00,001 to Rs. 10,00,000(d) 20%
Rs. 10,00,001 and above(c)(d) 30%
   
  (a) In case of a resident individual of the age of 60 years or above but below 80 years, the basic exemption limit is Rs. 300,000.
(b) In case of a resident individual of age of 80 years or above, the basic exemption limit is Rs 500,000.
(c) Rate of surcharge
    . 37% on base tax where specified income exceeds Rs. 5 crore;
    . 25% where specified income exceeds Rs. 2 crore but does not exceed Rs. 5 crore
    . 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crore; and
    . 10% where total income exceeds Rs 50 lakhs but does not exceed Rs. 1 crore.
    Specified income - Total income excluding income by way of dividend on shares and short term capital gains in case of listed equity shares, equity oriented mutual fund units, units of business trust and long-term capital gains.
    Marginal relief for such person is available.
(d) Health and Education cess @ 4% on aggregate of base tax and surcharge.
(e) Individuals having total income not exceeding Rs. 500,000 can avail rebate of lower of actual tax liability or Rs. 12,500 .
   
  New Regime
For Individuals, Hindu Undivided Family, Association of Persons, Body of Individuals and Artificial juridical persons

 
Total Income Tax Rates
Up to 3,00,000 NIL
From 3,00,001 to 6,00,000 5%
From 6,00,001 to 9,00,000 10%
From 9,00,001 to 12,00,000 15%
From 12,00,001 to 15,00,000 20%
Above 15,00,000 30%

a) For adopting New Regime, most of the deductions/exemptions such as section 80C, 80D, etc. are to be foregone. However, standard deduction of Rs. 50,000 against salary income is proposed to be allowed under New Regime. The aforesaid regime is optional. Accordingly, persons as mentioned above have the option to be taxed under either of the options. New Regime once exercised can be changed in subsequent years (not applicable for business income).
b) Resident individuals having total income not exceeding Rs. 7,00,000 can avail rebate of 25,000 or actual tax liability whichever is lower.
c) Rate of surcharge:
25% where specified income* exceeds Rs. 2 crore
15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crore; and
10% where total income exceeds Rs 50 lakhs but does not exceed Rs. 1 crore.

In case of AOP, consisting of only companies as its members, the rate of surcharge not to exceed 15%
*Specified income – Total income excluding income by way of dividend on shares and short term capital gains in case of listed equity shares, equity oriented mutual fund units, units of business trust and long-term capital gains.
   
   
2. Securities Transaction Tax (STT)
STT is levied on the value of taxable securities transactions as under.
 
Transaction Rates Payable By
Purchase/Sale of equity shares (delivery based) 0.1% Purchaser/Seller
Purchase of units of equity oriented mutual fund Nil Purchaser
Sale of units of equity oriented mutual fund 0.001% Seller (delivery based) 0.001% Seller
Sale of equity shares, units of equity oriented mutual fund (non-delivery based) 0.025% Seller
Sale of a option in securities 0.05%* Seller
Sale of an option in securities, where option is exercised 0.125% Purchaser
Sale of a futures in securities 0.01% Seller
Sale or surrender or redemption of a unit of an equity oriented fund to an insurance company, on maturity or partial withdrawal, with respect to unit linked insurance policy issued by such insurance company on or after the first day of February, 2021 0.001% Seller
Sale of units of an equity oriented fund to the Mutual Fund 0.001% Seller
Sale of unlisted equity shares and units of business trust under an initial offer 0.2% Seller
   
   
3. Special rates for non-residents as per domestic provisions
(1) The following incomes in the case of non-resident are taxed at special rates on gross basis:
 
Transation Rates (a)
Dividend 20%
Interest received on loans given in foreign currency to Indian concern or Government of India (not being interest referred to in section 194LB or section 194LC) 20%
Income received in respect of units purchased in foreign currency of specified Mutual Funds / UTI 20%
Royalty or fees for technical services(b) 10%
Interest income from a notified infrastructure debt fund, specified loan agreement, specified long-term bonds, rupee denominated bonds(c) and business trust 5%
Interest on FCCB, Dividend on GDRs 10%
   
  (a) These rates will be further increased by applicable surcharge and health and education cess.
(b) In case the non-resident has a Permanent Establishment (PE) in India and the royalty/ fees for technical services paid is effectively connected with such PE, the same is taxable at 40% (plus applicable surcharge and health and education cess) on net basis.
(c) Interest payable to a non-resident in respect of monies borrowed by any Indian company or business trust from a source outside India by way of issue of rupee denominated bond during the period 17 September 2018 to 31 March 2019 is exempt from tax.
   
  (2) Tax on non-resident sportsmen or sports association on specified income @20% plus applicable surcharge and health and education cess.
   
 
4. Capital Gains rates applicable to unit holders as per domestic provisions
 
Transaction Short-term capital gains tax rates (a) Long-term capital gains tax rates (a)(b)
Sale transactions of equity shares/ unit of an equity oriented fund which attract STT 15% 10%
Sale transaction other than mentioned above:
Individuals (resident and non-residents) Progressive slab rates 20% / 10% (b)
Firms 30%
Resident Companies 30% /25%(d)/22%(e)/15%(f)
Overseas financial organisations specified in section 115AB 40% (corporate) 30% (non corporate) 10%
FPIs 30% 10%
Foreign companies other than ones mentioned above 40% 20% / 10% (c)
Local authority 30% 20% / 10%
Co-operative society rates Progressive slab or 22%(g) / 15%(h)
 

* Income-tax at the rate of 10% to be levied on long-term capital gains exceeding Rs. 1 lakh (without indexation benefit and foreign exchange fluctuation)
(a) These rates will further increase by applicable surcharge & health and education cess.
(b) Income-tax rate of 20% with indexation and 10% without indexation.
(c) Long term capital gains arising to a non-resident from transfer of unlisted securities or shares of a company, not being a company in which the public are substantially interested, subject to 10 per cent tax (without benefit of indexation and foreign currency fluctuation.
(d) If total turnover or gross receipts in the financial year 2021-22 does not exceed Rs. 400 crores.
(e) This lower rate is optional and subject to fulfillment of certain conditions as provided in section 115BAA.
(f) This lower rate is optional for companies engaged in manufacturing business (set-up & registered on or after 1 October 2019) subject to fulfillment of certain conditions as provided in section 115BAB.
(g) Co-operative societies have the option to be taxed at progressive slab rates or 22% subject to fulfillment of certain conditions as provided in section 115BAD.
(h) This lower rate is optional for co-operative societies engaged in manufacturing or production business (set-up & registered on or after 1 April 2023) subject to fulfillment of certain conditions as provided in section 115BAE.

   
5. Personal Tax Scenarios (Amount in Rupees)
Individual Total Income
475,000 675,000 825,000 1,000,000 1,500,000 5,650,000 11,150,000 21,150,000 # 51,150,000 #
Tax in FY 2023-24 (Old Regime)* NIL*** 18,200 49,400 85,800 226,200 1,673,100 3,722,550 7,946,250 21,532,290
Tax in FY 2023-24 (New Regime) ** NIL*** NIL*** 39,000 62,400 156,000 1,595,880 3,641,820 7,858,500 19,558,500
Additional Tax burden/ (Savings) in New Regime - (18,200) (10,400) (23,400) (70,200) (77,220) (80,730) (87,750) (1,973,790)
Additional Tax burden/ (Savings) (%) in New Regime - (100%) (21.05%) (27.27%) (31.03%) (4.62%) (2.17%) (1.10%) (9.17%)
   
Resident senior citizen (age of 60 years but below 80 years) Total Income
475,000 675,000 825,000 1,000,000 1,500,000 5,650,000 11,150,000 21,150,000 # 51,150,000 #
Tax in FY 2023-24 (Old regime) * NIL*** 15,600 46,800 83,200 223,600 1,670,240 3,719,560 7,943,000 21,528,728
Tax in FY 2023-24 (New Regime) ** NIL*** NIL*** 39,000 62,400 156,000 1,595,880 3,641,820 7,858,500 19,558,500
Additional Tax burden/ (Savings) in New Regime - (15,600) (7,800) (20,800) (67,600) (74,360) (77,740) (84,500) (1,970,228)
Additional Tax burden/ (Savings) (%) in New Regime - (100%) (16.67%) (25.00%) (30.23%) (4.45%) (2.09%) (1.06%) (9.15%)
Resident senior citizen (age 80 years and above) Total Income
475,000 675,000 825,000
1,000,000

1,500,000 5,650,000 11,150,000 21,150,000 # 51,150,000 #
Tax in FY 2023-24 (Old Regime) * NIL*** 5200 36,400 72,800 213,200 1,658,800 3,707,600 7,930,000 21,514,480
Tax in FY 2023-24 (New Regime) ** NIL*** NIL*** 39,000 62,400 156,000 1,595,880 3,641,820 7,858,500 19,558,500
Additional Tax burden/ (Savings) in New Regime - 5,200 2600 (10,400) (57,200) (62,920) (65,780) (71,500) (1,955,980)
Additional Tax burden/ (Savings) (%) in New Regime - 100% 7.14% (14.29%) (26.83%) (3.79%) (1.77%) (0.90%) (0.90%)
* For purpose of tax calculation under Old Regime, ad hoc deduction of INR 150,000 has been claimed. The ad hoc deduction is only illustrative in nature. Basis actual deduction, the tax amount will vary
** For purpose of tax calculation under New Regime, no exemption/ deductions have been claimed and it has been proposed that enhanced surcharge of 37% should not apply.
*** NIL tax on account of rebate under section 87A.
# If the said taxable income includes income by way of dividend on shares and short-term capital gains in case of listed equity shares, equity oriented mutual fund units, units of business trust and long-term capital gains, then enhanced surcharge of 37% and 25% would not be applicable and accordingly effective tax rate would be lower.
 
 
Income-tax implications on income in respect of units of Mutual Fund
Type of Investor Withholding tax rate
Resident 10%*
NRI 20%** or rate as per applicable tax treaty*** (whichever is lower)
 
* Tax not deductible if dividend income in respect of units of a mutual fund is below Rs. 5,000 in a financial year.
** The base tax is to be further increased by surcharge at the rate of:
. 37% on base tax where specified income exceeds Rs. 5 crore;
. 25% where specified income exceeds Rs. 2 crore but does not exceed Rs. 5 crore;
. 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crore; and
. 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore.
In case investor is opting for ‘New Regime’ as mentioned on page 3, the rate of surcharge not to exceed 25%
Further, “Health and Education Cess” is to be levied at 4% on aggregate of base tax and surcharge.
*** Tax treaty benefit can be claimed subject to fulfillment of stipulated conditions as well as interpretation of Article of relevant tax treaty. **** As per section 139AA of the Income tax Act, 1961 (‘the Act’) read with rule 114AAA of the Income-tax Rules, 1962, in the case of a resident person, whose PAN has become inoperative due to PAN
– Aadhaar not being linked on or before 31 March 2023, it shall be deemed that he has not furnished the PAN and tax could be withheld at a higher rate of 20% as per section 206AA of the Act. For linking PAN with Aadhaar after 31 March 2022, fees Rs. 500 till 30 June 2022 and Rs. 1,000 till 31 March 2023 has been prescribed.
   
Capital Gain Taxation  
  Individual / HUF $ Domestic Company @ NRI $ #
Equity Oriented Schemes
Long Term Capital Gains (units held for more than 12 months) :: Short Term Capital Gains (units held for 12 months or less)
Long Term capital gains 10%* 10%* 10%*
Short term capital gains 15% 15% 15%
 
Other Than Equity Oriented Schemes
Long Term Capital Gains(units held for more than 36 months) :: Short Term Capital Gains (units held for 36 months or less )
Long Term capital gains 20% 20% Listed - 20%
Unlisted - 10%
Short term capital gains 30% ^ 30%/25%^^/22% ^^^/15%^^^^ 30% ^
 
Tax Deducted at Source (Applicable only to NRI Investors)#
  Short term capital gains$ Long term capital gains$
Equity oriented Schemes 15% 10%
Other than equity oriented Schemes 30% ^ Listed - 20%&
Unlisted - 10%*
 

* Income-tax at the rate of 10% (without indexation benefit and foreign exchange fluctuation) to be levied on long-term capital gains exceeding Rs. 1 lakh provided transfer of such units is subject to Securities Transaction Tax (‘STT’).
$ Surcharge to be levied at:
• 37% on base tax where specified income** exceeds Rs. 5 crore;
• 25% where specified income** exceeds Rs. 2 crore but does not exceed Rs. 5 crore;
• 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crore; and
• 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore

In case total income includes income by way of dividend on shares and short-term capital gains on units of equity oriented mutual fund schemes and long-term capital gains on mutual fund schemes, the rate of surcharge on the said type of income not to exceed 15%. In case investor is opting for ‘New Regime’ as mentioned on page 3, the rate of surcharge not to exceed 25%. ** Specified income – Total income excluding income by way of dividend on shares and short-term capital gains on units of equity oriented mutual fund schemes and long-term capital gains on mutual fund schemes.
Further, Health and Education Cess to be levied at the rate of 4% on aggregate of base tax and surcharge.
@ Surcharge at 7% on base tax is applicable where total income of domestic corporate unit holders exceeds Rs 1 crore but does not exceed 10 crores and at 12% where total income exceeds 10 crores. However, surcharge at flat rate of 10 percent to be levied on base tax for the companies opting for lower rate of tax of 22%/15%. Further, “Health and Education Cess” to be levied at the rate of 4% on aggregate of base tax and surcharge.
# Short term/ long term capital gain tax (along with applicable Surcharge and Health and Education Cess) will be deducted at the time of redemption of units in case of NRI investors. Tax treaty benefit can be claimed for withholding tax on capital gains subject to fulfillment of stipulated conditions.
& After providing indexation.
*** Without indexation.
^ Assuming the investor falls into highest tax bracket.
^^ If total turnover or gross receipts in the financial year 2021-22 does not exceed Rs. 400 crores.
^^^ This lower rate is optional and subject to fulfillment of certain conditions as provided in section 115BAA.
^^^^ This lower rate is optional for companies engaged in manufacturing business (set-up & registered on or after 1 October 2019) subject to fulfillment of certain conditions as provided in section 115BAB.
Further, the domestic companies are subject to minimum alternate tax (except for those who opt for lower rate of tax of 22%/15%) not specified in above tax rates. Transfer of units upon consolidation of mutual fund schemes of two or more schemes of equity oriented fund or two or more schemes of a fund other than equity oriented fund in accordance with SEBI (Mutual Funds) Regulations, 1996 is exempt from capital gains.
 
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Further, the domestic companies are subject to minimum alternate tax (except for those who opt for lower rate of tax of 22%/15%) not specified in above tax rates.

Transfer of units upon consolidation of mutual fund schemes of two or more schemes of equity oriented fund or two or more schemes of a fund other than equity oriented fund in accordance with SEBI (Mutual Funds) Regulations, 1996 is exempt from capital gains.

Transfer of units upon consolidation of plans within mutual fund schemes in accordance with SEBI (Mutual Funds) Regulations, 1996 is exempt from capital gains.

Relaxation to non-residents from deduction of tax at higher rate in the absence of PAN subject to them providing specified information and documents.

The Finance Act, 2021 introduced section 206AB (applicable from 1 July 2021) stating that tax to be deducted at twice the applicable rate in case of payments to specified person (except non-resident not having permanent establishment in India) who have not filed return of income for past two assessment years for which time limit for filing return has expired and the aggregate of tax deducted at source in his case is Rs. 50,000 or more in each of these two years. Additionally, if provisions of section 206AA are also applicable then tax to be deducted at higher of the two rates provided i.e. rate as per section 206AB or section 206AA.

Bonus Stripping: The loss due to sale of original units in the schemes, where bonus units are issued, will not be available for set off; if original units are: (A) bought within three months prior to the record date fixed for allotment of bonus units; and (B) sold within nine months after the record date fixed for allotment of bonus units. However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units.
 
Disclaimer: The information set out above is included for general information purposes only and does not constitute legal or tax advice. In view of the individual nature of the tax consequences, each investor is advised to consult his or her own tax consultant with respect to specific tax implications arising out of their participation in the Scheme. Income Tax benefits to the mutual fund & to the unit holder is in accordance with the prevailing tax laws as certified by the mutual funds tax consultant. Any action taken by you on the basis of the information contained herein is your responsibility alone.