Section 88 (2) (XIII B)

Rebate @ 20% for investments upto a maximum of Rs 10,000. Rebate @ 30% w.e.f April 1, 2001 if the gross salary does not exceed Rs 1 lac and is not less than 90 per cent of his gross total income from all other sources. Where a rebate under section 88 is claimed, the cost of such units shall no be taken into account for the purposes of sections 54EA, 54EB and 54EC.

Section 88 (2) (XIII C)

Rebate @ 20% for investments upto a maximum of Rs 60,000. Rebate @ 30% w.e.f April 1, 2001 if the gross salary does not exceed Rs 1 lac and is not less than 90 per cent of his gross total income from all other sources. Where a rebate under section 88 is claimed, the cost of such units shall no be taken into account for the purposes of sections 54EA, 54EB and 54EC. However, in case of individuals whose income derived from the exercise of his/her profession as an author, playwright, artist, musician or sportsman (including an athlete) is 25% or more of his/her total income, the deduction will be at a higher rate @ 25% subject to a maximum of Rs 17,500.

Section 54EA

Capital gains arising from the transfer of a long-term capital asset (on or after October 1, 1996) shall be exempt from tax if the assessee invests within a period of six months after the date of transfer the whole of the net consideration in the fund for a period of 3 years. Where only a part of the net consideration is invested, then capital gains proportionate to the net consideration invested will be exempt. (not applicable for sale of long-term capital asset made after March 31, 2000).

Section 54EB

Capital gains arising from the transfer of a long-term capital asset (on or after October 1, 1996) shall be exempt from tax if the assessee invests within a period of six months after the date of transfer the capital gains in the fund for a period of 7 years. (not applicable for sale of long-term capital asset made after March 31, 2000). Exemption will be to the extent of long-term capital gains invested.

Section 54EC

Long-term capital gains arising on transfer of units shall be exempt from tax if the assessee invests within a period of six months after the date of transfer the capital gains in Bonds of NABARD, NHAI issued on or after April 1, 2000 and bonds of REC issued on or after April 1, 2001. Exemption will be to the extent of long-term capital gains invested.

Section 54ED

Effective April 1, 2001, long-term capital gains arising on transfer of units shall be exempt from tax to the extent such gains are invested, within six months of such transfer, in acquiring the equity shares forming part of a public issue of an India Public Company. Further, if the newly-acquired shares are sold or transferred within one year, the capital gains from the original asset will be charged to tax in the year of sale or transfer.

Section 10(33)

All dividends distributed by mutual funds, with effect from the Assessment year 1998-99, would be exempt in the hands of the individuals.

Section 112(1)

With effect from April 1, 2000, Long-term Capital Gains on sale of units of mutual funds to be taxed @ 10% without indexation benefit or @20% with indexation benefit, whichever is less.

Section 194K

A mutual fund is required to deduct tax at source @ 15% at the time of payment or credit (whichever is earlier) of any income exceeding Rs 10,000 to a resident unitholder of the fund. If the unitholder is a company, tax is required to be deducted @ 20%. Under section 196A tax is required to be deducted @20% if the unitholder is a non-resident non-corporate or a foreign company. (not applicable w.e.f June 1, 1999).

Section 197

No tax is deductible at source (or deduction at a lower rate) if the unitholder obtains a certificate, from his assessing officer, to that effect. (not applicable w.e.f June 1, 1999).

Section 94(7)

With effect from April 1, 2001, capital loss arising on sale of units, which are bought within 3 months prior to the record date (date fixed by the fund for the purposes of entitlement of the unitholder to receive the income) and sold within 9 months after the record date, shall be ignored to the extent of exempt income received or receivable on such units during the said period.

Section 64(1A)

Where redemption of units is made during the minority of the child, tax will be levied on either of the parents, whose income is greater. When the child attains majority, such tax liability will be on the child.

Section 115(R)

With effect from June 1, 2001, open-end mutual funds with less than 50% allocation to equities (excluding Unit Scheme ’64) and closed-end funds would be required to pay a tax of 10% (tax @ 20% between June 1, 2000 to May 31, 2001) on the incomes distributed.