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Q- My wife has invested ₹6 lakh each in four mutual funds in August 2021. As per the Systematic Withdrawal Plan (SWP), she is getting ₹4,250 per month from each mutual fund. As a senior citizen, this amount will take her total income to more than ₹3 lakh. Can you please tell me what will be her tax liability out of these SWPs?
– Shevde.
The applicable tax rate on the total income, including dividend income from mutual fund SWP, would be determined based on the income tax slabs as applicable to your wife. Such tax computed would be further increased by health and education cess at 4%.
Assuming that your wife is a resident Indian senior citizen i.e. she is 60 years of age, having a net total income of up to ₹5 lakh, she would be eligible for rebate under Section 87A of the IT Act and as such there may not be any tax liability.
Answered by Dr. Suresh Surana, Founder, RSM India. Send your queries at mintmoney@livemint.com.
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