(i) Resident Investors
As per Central Board of Direct Taxes (‘CBDT’) circular No.715 dated 8th August 1995, in case of resident unitholders no tax is required to be deducted from capital gains arising at the time of redemption of the units.

(ii) For Non Resident Investors

Long term capital gains
No tax is deductible from the proceeds payable to non resident investors from long term capital gains arising out of redemption of units of an equity oriented fund.

Short term capital gains
As per Part II of the First Schedule to the Finance Act 2008 {Clause 1 (b) (i) (C)}, the Mutual Fund is liable to deduct tax @ 15% on short term capital gains. The TDS is to be increased by applicable surcharge.

(iii) In the case of a Company

Other than a Domestic Company:

Long term capital gains
No tax is to be deducted from the proceeds payable to non resident investors from long term capital gains arising out of redemption of units of an equity oriented fund.

Short term capital gains
As per Part II of the First Schedule to the Finance Act 2008 {Clause 2 (b) (vii)}, the Mutual Fund is liable to deduct tax @ 15% on short term capital gains. The TDS will have to be increased by applicable surcharge.

(iv) Foreign Institutional Investors (FIIs) :
In the case of Foreign Institutional Investors (FIIs), no tax would be deductible at source from the capital gains arising on redemption of units in view of section 196 D (2) of the Act.

Education Cess and Surcharge:
The tax / TDS (except STT) is to increased by applicable surcharge. Further an education cess @ 2% and secondary and higher education cess @1% is to be charged on amount of tax and surcharge.

Retriement Benefit Plan, Unit Linked Insurance Plan, Equity Linked Savings Scheme :
Tax benefits under section 80 C
Contribution made by individuals and HUFs in the above Plans / Scheme will be eligible for deduction of the whole of the amount paid or deposited subject to a maximum of Rs.1,00,000/- under Section 80 C of Income Tax Act, 1961 as provided therein.