| Taxation |
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 |
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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 as under:
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Rate |
| Public Company and Insurance Company |
10% |
| If received by any other person, including a non-resident |
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.
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| Capital Gain Tax |
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In budget 2010-11, the Government has finally withdrawn the exemption of Capital Gain Tax (CGT) on sale of securities. Following are the key features related to CGT:
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Less than six months. Initial tax rate of 10 percent for two years, which will be increased gradually by 2.5 percent each year (from FY2012 onwards), bringing the final rate to 17.5 percent in FY2014.
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More than 6 months and less than one year. Initial tax rate of 8 percent for first year, which will increase gradually by 0.5 percent each year (from FY2011 onwards), bringing the final rate of 10 percent in FY2015.
- The Asset Management Company shall withhold the tax and deposit the same in Government Treasury within 7 days of its deduction.There will be no CGT for holding period more than 12 months (long-term investments).
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| Tax Credit |
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Unit Holders of Atlas Money Market Fund, 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; or
(b) Fifteen percent of the taxable income of the Unit Holder; or
(c) Rupees Five Hundred Thousand (Rs 500,000);
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 thirty six 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.
According to Section 62 of the income tax ordinance 2001, Rs. 100,000/- is maximum tax credit on an annual taxable income of Rs. 4.55 million, subject to investment being held for at least 3 years.
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