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Home Acts & Rules Bill Bills FINANCE BILL, 2011 Chapters List Chapter III - Part 1 Direct Taxes - Income Tax This

Clause 20 - Amendment of section 115R. - FINANCE BILL, 2011

FINANCE BILL, 2011
Chapter III - Part 1
Direct Taxes - Income Tax
  • Contents

20. In section 115R of the Income-tax Act, in sub-section (2), with effect from the 1st day of June, 2011,—

(a) in clause (i), for the words "income distributed", the words "income distributed to any person being an individual or a Hindu undivided family" shall be substituted;

(b) after clause (i), the following clause shall be inserted, namely:—

"(ia) thirty per cent. on income distributed to any other person by a money market mutual fund or a liquid fund;";

(c) in clause (iii), for the words "twenty per cent.", the words "thirty per cent." shall be substituted.

 



 

Notes on Clauses:

Clause 20 of the Bill seeks to amend section 115R of the Income-tax Act relating to tax on distributed income to unit holders.

Under the existing provisions contained in sub-section (2) of the aforesaid section, any amount of income distributed by the specified company or a Mutual Fund to its unit holders shall be chargeable to tax and such specified company or Mutual Fund shall be liable to pay additional income-tax on such distributed income at the rate of twenty-five per cent. on income distributed by a money market mutual fund or a liquid fund;  twelve and one-half per cent. on income distributed to any person being an individual or a Hindu undivided family by a fund other than a money market mutual fund or a liquid fund; and twenty per cent. on income distributed to any other person by a fund other than a money market mutual fund or a liquid fund.

It is proposed to amend clause (i) of sub-section (2) of the aforesaid section to specifically provide that additional income-tax at the rate of twenty-five per cent shall be leviable on any income distributed to an individual or a Hindu undivided family by a money market mutual fund or a liquid fund.

It is further proposed to insert a new clause (ia) after clause (i) in sub-section (2) of the aforesaid section to provide that any income distributed to any other person by a money market mutual fund or a liquid fund shall be liable to additional income-tax at the rate of thirty per cent.

It is also proposed to amend clause (iii) of sub-section (2) of the aforesaid section so as to increase the rate of additional income-tax from twenty per cent. to thirty per cent. on any income distributed to any other person by a fund other than a money market mutual fund or a liquid fund.

These amendments will take effect from 1st June, 2011.

 
 
 
 

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