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Unit 9: Financial Management Decisions

For the purpose of this clause “Administrator” means the Administrator as referred to in clause Notes
(a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and

“speciﬁed company” means a company as referred to in clause (h) of section 2 of the Unit Trust
of India (Transfer of Undertaking and Repeal) Act, 2002.

The administrator of speciﬁed undertaking shall not be required to pay the tax on income
distributed to the unit holders. Even the unit holders are also exempt from tax in respect of such
incomes under section 10(35).

Due Date for Payment of Tax

The person responsible for making payment of income distributed by the speciﬁed company or a

Mutual Fund and the speciﬁed company or the Mutual Fund, as the case may be, shall be liable
to pay the tax on the distribution income within 14 days from the date of distribution or payment
of such income whichever is earlier.
The person responsible for making payment of income distributed by the Unit Trust of India or
a Mutual Fund and the Unit Trust of India or the Mutual Fund, as the case may be, shall be ﬁ led
on or before 15th day of September in each year, in case of the Unit Trust of India statement of
distributed income in Form No. 63 and in case of Mutual Fund statement of distributed income
in Form No. 63A and veriﬁed by speciﬁed persons (an accountant) in the manner indicated

therein to the Assessing Ofﬁcer so designated by the Chief Commissioner or Commissioner of

Income-tax within whose area of jurisdiction, the principal ofﬁce of the Unit Trust of India or the

concerned Mutual Fund is situated or in any other case, to the Assessing Ofﬁcer within whose
area of jurisdiction, the principal ofﬁce of the Unit Trust of India or the concerned Mutual Fund

is situated.
1. The Unit Trust of India or the Mutual Fund shall not be allowed any deduction in respect
of the amount which has been charged to tax or the tax thereon under section 115R(1) or
under section 115R(2).
2. Unit holder shall not be liable to pay tax on income distributed on units by the speciﬁ ed
company or a mutual fund or administrator by virtue of section 10(35).

3. The speciﬁed company or a mutual fund will not be liable to pay the tax in respect of
income distributed to a unit holder of equity oriented funds. Even the unit holder shall not
be liable to pay tax on such income since it is exempted under section 10(35) in hands of the
unit holder.

4. Tax is on distributed income i.e. amount of income distributed by mutual fund or the

speciﬁed company. Therefore, redemption of units or repurchase of units is not covered by
this chapter.
Section 115-S: Interest Payable for Non-payment of Tax

Where the person responsible for making payments of the income distributed by the speciﬁ ed

company or a Mutual Fund and the speciﬁed company or a Mutual Fund, as the case may be,
fails to pay the whole or any part of the tax as is referred to in sub-section (1) or sub-section (2) of
section 115R, within the 14 days mention above, he or it shall be liable to pay simple interest at
the rate of 1% for every month or part thereof on the amount of such tax for the period beginning
on the date immediately after the last date on which such tax was payable and ending with the
date on which the tax is actually paid.

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