Switch in MF schemes attracts capital gains

Font Size

Print

Feedback

Email

Discuss

: a)Where can I get the application form for UIN

b)If the investment in an equity based scheme is switched to another scheme, will be treated as fresh investment in the new scheme

Subhash Sharma, 25 AAvas Vikas Colony, Bijanour - 246701

1. You must be aware that it is no more mandatory for registering yourself under UIN.

2. Yes, it will be treated as a fresh investment in the new scheme. The switch will attract the provisions of capital gains also.

Hindustan Lever gave secured fully paid 9% non convertible bonus debentures of Rs 6 each allotted on 2-7-03 Record date 1-12-04 These were redeemed on 1-1-05.

Is the redemption amount to be treated as capital gains and capital tax is to be paid at 10% only as indexation is not possible. Is this correct or is there any other scenario. — JR Patell, jimpatell@hotmail.com

The interest received on these debentures is taxable. The debenture amount is completely tax-free.

These debentures were issued in lieu of dividend payable (deemed dividend) on which dividend distribution tax was paid by Hindustan Lever Ltd. in the year of issue.

There is no capital gains involved. The annual report of HLL mentions this.

I wanted to know about 8% GoI Bonds. Is it really hassle free? My concern is whether I'll get the half-yearly interest credited directly in my bank account. Or, will I have to go personally and collect it? You have often mentioned about the unprofessionalism that we sometimes have to put with, while using Post Office schemes. Hope that is not the case with GoI Bonds. Would you recommend 8% GoI Bonds from the point of view of user-friendliness — Jaysing, jaysing1968@indiatimes.com

Yes, this avenue is hassle-free and the 'unprofessionalism' is minimum.

At present the ECS facility (credit direct to your bank account) is available only for members having a bank account in Ahmedabad, Bangalore, Bhubaneswar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna, Pune and Thiruvananthapuram cheque clearing zones. Additional centres are likely to be added.

Where there is no ECS, it is desirable for the investor to open a bank account at the same bank branch to facilitate the payment of interest.

Is the LTA paid to employee taxable as fringe benefit tax in the hands of employer? — Jai Singh