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Education > Taxation - Mutual Funds |
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Taxation - Mutual Funds |
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The income of Mutual Funds will be exempt from
Income Tax, if not less than 90% of the income of the year, as reduced
by realized and unrealized capital gains is distributed amongst
the Unit Holders as dividend or Bonus Units. |
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| TAXATION ON UNIT HOLDERS |
The information set forth below
is included for general information purpose only. In view of the
individual nature of tax consequences, each investor is advised
to consult with his tax advisor with respect to the specific tax
consequences to him/her of investing in mutual funds.
Holders of mutual funds will be subject to Income Tax on Dividend
Income received from a mutual fund (excluding the amount of dividend
paid out of capital gains on listed securities) as under:
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Rate |
| Public Company and Insurance Company |
10% |
| If received by any other person, including a non-resident
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10% |
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The rate of tax so specified will be the final
tax and the payer (Trustee) will also be required to withhold the
amount of tax at source.
Unit Holders who are exempt from income tax may obtain exemption
certificate from the commissioner of Income Tax and on the basis
of the exemption certificate, income tax will not be withheld.
Every banking company or non-banking finance company shall be chargeable
to tax under the Head “Income from Business” on the
portion on debt, if any, included in Dividend, distributed by Atlas
Funds, out of its income.
Capital Gains on disposition of Units in the Funds will be subject
to capital gains tax at the applicable tax rate. The Units of the
Funds are listed on a Stock Exchange in Pakistan and due to such
listing; the gain on disposal of Units shall be exempt from tax
up to Tax Year ending on thirtieth day of June 2007.
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| TAX CREDIT |
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As all Atlas Funds are listed at the Stock Exchange, Unit Holders of Atlas
Funds, other than a company, shall be entitled to a tax credit under
section 62 of the Income
Tax Ordinance 2001 on purchase of new Units. The amount on which
tax credit will be allowed shall be lower of (a) amount invested
in purchase of new Units, (b) ten percent of the taxable income
of the Unit Holder, or (c ) Rupees Three Hundred Thousand (Rs 300,000),
and will be calculated by applying the average rate of tax of the
Unit Holder for the tax year. If the Units so acquired are disposed
within twelve months, the amount of tax payable for the tax year
in which the Units are disposed shall be increased by the amount
of credit allowed. |
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