Concessional (lower) rate of tax is paid on Equity Mutual Funds since they are subject to Securities Transaction Tax (STT). STT is not applicable on purchase of units of an equity scheme.
STT is not applicable to transactions in debt and liquid funds. The STT amount must be shown separately in the Statement of Account issued to the investor.
A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund are required to report details of receipt from any person of an amount aggregating to Rs. 10 lakh or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund) to the Income Tax authority. RTA, on behalf of the AMC, provides the details of such financial transactions to the CBDT.
Instant Access Facility - IAF facilitates credit of redemption proceeds in the bank account of the investor on the same day of the redemption request. The MFs/AMCs can offer IAF only in Liquid schemes of the mutual fund.
OCBs are currently prohibited from investing in Indian mutual funds.
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