News By/Courtesy: Muskan Chanda | 01 Jul 2020 21:42pm IST

HIGHLIGHTS

  • Categories of mutual funds will attract stamp duty for the first time.
  • SEBI said that stamp duty will be applicable on alternative investment funds (AIFs) from 1 of July
  • The impact is more on the short term investments by the investors.

Categories of mutual funds will attract stamp duty for the first time.
The Securities and Exchange Board of India (SEBI) said that stamp duty will apply to alternative investment funds (AIFs) from 1 of July. Registrars appointed by AIFs will collect stamp duty on issue, sale, and transfer of units of AIFs, as per the orders.

The finance minister on the 30th of June said that states will collect stamp duty at a uniform rate on transactions of shares, debentures, and other securities from the 1st of July.

Following the provision of the Indian Stamp Act, AIFs need to transfer the amount to Registrar to an issue and share Transfer Agents (RTA)upon appointment for onward remittance to states or union territories. 
Stamp duty will be deducted from the dividend amount fewer TDS (if any) for units under a dividend reinvestment, and units will be created for the balance amount.

A respective stock exchange or clearing corporation will collect the stamp duty if transactions are done through stock exchanges. 
All shares and mutual fund purchases will have 0.005% of stamp duty, and any transfer of mutual fund units will have 0.015% of stamp duty. The stamp duty will apply to all transactions. 
This will have less impact on long term investments by the investors as the stamp duty would be nominal so they need not worry about it. The impact is more on the short term investments by the investors who invest in liquid and overnight schemes of mutual funds, such as banks, corporates, etc. they need to go for long term investments. 


“THIS ARTICLE DOES NOT INTEND TO HURT THE SENTIMENTS OF ANY INDIVIDUAL, COMMUNITY, SECT, OR RELIGION ETCETERA. THIS ARTICLE IS BASED PURELY ON THE AUTHOR'S PERSONAL VIEWS AND OPINIONS IN THE EXERCISE OF THE FUNDAMENTAL RIGHT GUARANTEED UNDER ARTICLE 19(1)(A) AND OTHER RELATED LAWS BEING FORCE IN INDIA, FOR THE TIME BEING.”

Section Editor: Pushpit Singh | 02 Jul 2020 2:28am IST


Tags : #SEBI #mutualfunds #stampduty

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