A mutual fund is a trust that holds the savings of a number of investors - institutional and individual - who share a common financial goal. The accumulated money is then invested in capital market instruments such as shares, debentures, and other securities. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment for the common investors as it offers an opportunity to invest in a diversified and professionally managed basket of securities at a relatively low cost. Mutual fund investments are, however, subject to tax exemptions.
Income Tax exemptions on mutual funds of India:
Chapter III of the Income Tax Act, 1961 provides for exemptions in income tax. There are few specified incomes on which a person can get exemptions. It means that at the time of calculating annual income, this type of income will not be added. For claiming any of these exemptions, it is necessary to furnish documents which shows that your income comes under this list.
Income of specified Mutual Funds registered and/or set up under/by SEBI Act, 1992, public sector bank/financial institution/RBI fulfilling such conditions as specified. Ref. Income Tax Act 10(23D).
Some Tax Saving Mutual Funds India available, are -
-SBI Mutual Funds
-Prudential ICICI
-Bank Of Baroda
-Bajaj Capital
-DSP Merrill Lynch Mutual Fund India
-Franklin Templeton Mutual Fund India
-Standard Chartered Mutual fund India
Tax Saving Mutual Funds India generally maintains the following rules of the SEBI while granting tax benefits on their schemes -
Any special tax benefits for the mutual fund company and its shareholders (only section numbers of the Income Tax Act and their substance should be mentioned,without reproducing the text of the sections).
Tax benefits are to be declared under the column of "objects of the offering".
For further information on Tax Saving Mutual Funds India, visit
www.sebi.gov.in