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NISM Series V-D · Chapter 8: Taxation

कराधान · NISM-Series-V-D: Mutual Fund – Specialized Investment Fund (SIF) Distributors Certification Examination

3% weightage · ~5 questions 150 questions · 180 minutes · 60% to pass · −0.10 per wrong answer 15 practice questions in our bank

What this chapter covers

How mutual fund returns are taxed in the investor's hands: equity versus non-equity classification, short- and long-term capital gains and the current rates, IDCW taxation and TDS, STT, stamp duty, and the ELSS deduction.

इक्विटी बनाम गैर-इक्विटी वर्गीकरण, पूँजीगत लाभ कर, IDCW, STT, स्टाम्प ड्यूटी और ELSS।

What to master before the exam

Exam tip: Only four marks, but every question is a rate or a threshold. Memorise the current numbers from the workbook edition you are studying — the formula sheet lists them.

Sample questions from this chapter

Five of the 15 questions in our free bank. Open the answer to see the explanation — every question in the mock test has one, in English and Hindi.

Question 1
What tax applies on the income earned by a mutual fund scheme itself?
म्यूचुअल फंड योजना द्वारा स्वयं अर्जित आय पर कौन-सा कर लगता है?
  1. It varies by type of incomeयह आय के प्रकार पर निर्भर करता है
  2. The income earned by a mutual fund is exempt from taxम्यूचुअल फंड द्वारा अर्जित आय कर से मुक्त है
  3. 10% plus surcharge and cess10% जमा अधिभार व उपकर
  4. The investor’s marginal rateनिवेशक की सीमांत दर
Show answer & explanation
Answer: B — The income earned by a mutual fund is exempt from tax
A mutual fund is a pass-through vehicle — the income earned by the scheme is exempt from tax; tax arises in the investor’s hands on redemption/dividend.
म्यूचुअल फंड एक पास-थ्रू साधन है — योजना द्वारा अर्जित आय कर-मुक्त है; कर निवेशक के हाथ में रिडेम्पशन/लाभांश पर लगता है।
Question 2
Redemption of which of the following would attract Securities Transaction Tax (STT) for the investor?
निम्नलिखित में से किसके रिडेम्पशन पर निवेशक को प्रतिभूति लेनदेन कर (STT) लगेगा?
  1. A multi-cap (equity-oriented) fundएक मल्टी-कैप (इक्विटी-ओरिएंटेड) फंड
  2. A Government Securities fundएक गवर्नमेंट सिक्योरिटीज़ फंड
  3. A liquid fundएक लिक्विड फंड
  4. An overnight fundएक ओवरनाइट फंड
Show answer & explanation
Answer: A — A multi-cap (equity-oriented) fund
STT applies only on redemption/switch/sale of units of equity-oriented funds (like a multi-cap fund); it does not apply to debt schemes or on purchase.
STT केवल इक्विटी-ओरिएंटेड फंडों (जैसे मल्टी-कैप फंड) की यूनिटों के रिडेम्पशन/स्विच/बिक्री पर लगता है; डेट योजनाओं या खरीद पर नहीं।
Question 3
For income-tax purposes, a scheme is an “equity-oriented fund” if it holds more than:
आयकर हेतु, कोई योजना "इक्विटी-ओरिएंटेड फंड" तब है जब वह कितने से अधिक रखती है?
  1. 65% of AUM in equity shares listed on recognised Indian stock exchangesAUM का 65% मान्यता प्राप्त भारतीय स्टॉक एक्सचेंजों पर सूचीबद्ध इक्विटी शेयरों में
  2. 10% in any equityकिसी इक्विटी में 10%
  3. 50% in gold50% सोने में
  4. 100% in foreign shares100% विदेशी शेयरों में
Show answer & explanation
Answer: A — 65% of AUM in equity shares listed on recognised Indian stock exchanges
A fund holding more than 65% of AUM in equity shares listed in India is equity-oriented for tax; an equity fund-of-funds is treated as non-equity.
AUM का 65% से अधिक भारत में सूचीबद्ध इक्विटी शेयरों में रखने वाला फंड कर हेतु इक्विटी-ओरिएंटेड है; इक्विटी फंड-ऑफ-फंड्स को गैर-इक्विटी माना जाता है।
Question 4
Long-term capital gains on an equity-oriented fund (units held over 12 months) are taxed at:
इक्विटी-ओरिएंटेड फंड पर दीर्घावधि पूँजीगत लाभ (12 माह से अधिक धारित यूनिट) पर कर की दर है:
  1. 12.5%, on the gains above the ₹1.25 lakh yearly exemption12.5%, ₹1.25 लाख वार्षिक छूट से ऊपर के लाभ पर
  2. 30% flatसपाट 30%
  3. Fully exempt alwaysहमेशा पूर्णतः मुक्त
  4. 0.005%0.005%
Show answer & explanation
Answer: A — 12.5%, on the gains above the ₹1.25 lakh yearly exemption
For equity-oriented funds, LTCG (holding > 12 months) is taxed at 12.5%, with the first ₹1.25 lakh of such gains per financial year exempt.
इक्विटी-ओरिएंटेड फंडों के लिए, LTCG (12 माह से अधिक धारण) पर 12.5% कर लगता है, प्रति वित्त वर्ष ऐसे लाभ के पहले ₹1.25 लाख छूट के साथ।
Question 5
Short-term capital gains on an equity-oriented fund are taxed at:
इक्विटी-ओरिएंटेड फंड पर अल्पावधि पूँजीगत लाभ पर कर की दर है:
  1. 20%20%
  2. 5%5%
  3. The marginal slab rateसीमांत स्लैब दर
  4. Exemptमुक्त
Show answer & explanation
Answer: A — 20%
STCG on equity-oriented funds (units held up to 12 months) is taxed at 20%. For debt-oriented funds, both STCG and LTCG are taxed at the marginal slab rate.
इक्विटी-ओरिएंटेड फंडों पर STCG (12 माह तक धारित यूनिट) पर 20% कर लगता है। डेट-ओरिएंटेड फंडों के लिए STCG व LTCG दोनों सीमांत स्लैब दर पर।
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All V-D chapters

1. Investment Landscape · 5%2. Concept and Role of a Mutual Fund · 4%3. Legal Structure of Mutual Funds in India · 3%4. Legal and Regulatory Framework · 7%5. Scheme Related Information · 7%6. Fund Distribution and Channel Management · 4%7. NAV, Total Expense Ratio and Pricing of Units · 5%8. Taxation · 3%9. Investor Services · 10%10. Risk, Return and Performance of Funds · 5%11. Mutual Fund Scheme Performance · 5%12. Mutual Fund Scheme Selection · 10%13. Basics of Derivatives · 10%14. Understanding the Index · 5%15. Introduction to Forwards and Futures · 15%16. Introduction to Options · 13%17. Strategies using Equity Futures and Options · 9%18. Interest Rate, Instruments and Fixed Income · 6%19. Interest Rate Derivatives · 2%20. Exchange Traded Interest Rate Futures · 10%21. Exchange Traded Interest Rate Options · 6%22. Strategies using Interest Rate Derivatives · 6%
← Chapter 7: NAV, Total Expense Ratio and Pricing of Units Chapter 9: Investor Services →

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