Tax rate on mutual fund dividends set to rise to 25% in FY25

MG News | June 12, 2024 at 10:12 PM GMT+05:00

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June 12, 2023 (MLN): The Federal government has proposed that the tax rate on dividends derived from mutual funds that earn 50% or more of their income from profit on debt be increased to 25% for the fiscal year 2024-2025.

At present, dividend income from mutual funds is taxed at 15%.

However, the decision to increase the tax rate is aimed at reducing the arbitrage between individual persons deriving income from profit on debt and persons earning dividend income from mutual funds deriving income from profit on debt.

This is expected to shift mutual funds more towards equity funds, as interest rates are also going down, boosting the already uplifted stock market.

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