Amendment of section 115R
41. In section 115R of the Income-tax Act,––
(a) after the Explanation to sub-section (2), the following sub-section shall be inserted with effect from the 1st day of October, 2014, namely:––
“(2A) For the purposes of determining the additional income-tax payable in accordance with sub-section (2), the amount of distributed income referred therein shall be increased to such amount as would, after reduction of the additional income-tax on such increased amount at the rate specified in sub-section (2), be equal to the amount of income distributed by the Mutual Fund.”;
(b) sub-section (3A) shall be omitted with effect from the 1st day of April, 2015.
Notes on Clauses:
Clause 41 of the Bill seeks to amend section 115R of the Income-tax Act relating to tax on distributed income to unit holders.
Sub-section (2) of aforesaid section provides that any amount of income distributed by the specified company or a Mutual Fund to its unit holder shall be charged to additional income-tax at the rate of twenty-five per cent., where the income is distributed to any person being an individual or a Hindu undivided family, and at the rate of thirty per cent. on income distributed to any person other than an individual or a Hindu undivided family. It is further provided that an additional tax at the rate of five per cent. shall be levied in case of income distributed by a Mutual Fund under an Infrastructure Debt Fund Scheme to a person who is non- resident.
It is proposed to amend the said section to provide that for the purposes of determining the additional income-tax payable in accordance with said sub-section (2), the amount of distributed income, referred to therein, shall be increased to such amount as would, after reduction of the additional income-tax on such increased amount at the rate specified in sub-section (2), be equal to the amount of income distributed by the Mutual Fund.
This amendment will take effect from 1st October, 2014.
The existing provisions contained in sub-section (3A) of section 115R provide that the person responsible for making payment of the income distributed by the Unit Trust of India or a Mutual Fund and the Unit Trust of India or the Mutual Fund, as the case may be, shall on or before the 15th September in each year, furnish to the prescribed income-tax authority, a statement in the prescribed form and verified in the prescribed manner, giving the details of the amount of income distributed to unit holders during the previous year, the tax paid thereon and such other relevant details as may be prescribed.
It is proposed to omit sub-section (3A) of the aforesaid section 115R.
This amendment will take effect from 1st April, 2015.
