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10% TDS only on MF dividends
Why is it in the news?
- The government has clarified that mutual fund houses must deduct 10% tax at source (TDS) on dividends.
More in the news
- Central Board of Direct Taxes (CBDT) issued a clarification, after the Budget presentation.
- Budget proposal had led to concerns whether the 10% TDS would be applicable only on the dividend or whether any capital gains arising at the time of redemption would be taxed.
- CBDT Statement:
(1) It is hereby clarified that under the proposed section, a mutual fund shall be required to deduct TDS @ 10% only on dividend payment and no tax shall be required to be deducted by the mutual fund on income which is in the nature of capital gains
- Necessary clarification, if required, shall be proposed in the relevant provision of the law.
Source
The Hindu.