Jump to content

Welcome to Tezi Mandee - Community Of Pakistani Investors & Traders
Register now to gain access to all of our features. Once registered and logged in, you will be able to create topics, post replies to existing threads, give reputation to your fellow members, get your own private messenger, post status updates, manage your profile and so much more. If you already have an account, login here - otherwise create an account for free today!

Welcome to Tezi Mandee - Community Of Pakistani Investors & Traders

Welcome to Tezi Mandee - Community Of Pakistani Investors & Traders, like most online communities you must register to view or post in our community, but don't worry this is a simple free process that requires minimal information for you to sign up. Be a part of Tezi Mandee - Community Of Pakistani Investors & Traders by signing in or creating an account.
  • Start new topics and reply to others
  • Get latest news on Karachi Stock Market
  • Subscribe to topics and forums to get automatic updates
  • Registered member get added in mailing list for mailing updates
  • Get your own profile and make new friends
  • Customize your experience here
  • Be the first to know the KSE latest announcements shared by our members
  • Registered members get access to Protected Forums and topics
  • Registration is free Create Account
  • If you are already a member just Sign in
To Create Account ( Click Here )
To Sign In ( Click Here )
 

Impact of Budget 2012-13 on Mutual Fund Industry of Pakistan

Mutual Fund Industry Budget 2012-13 Impact of Budget Capital gain tax Provident funds investing Tax rate on dividends Tax credit limit FY13 Budget Mutual Fund Industry of Pakistan

1 reply to this topic

#1
Amin Khan

    CAPTAIN

  • Member
  • 9,048 posts
  • Joined 24-August 08
  • Skin: Main Blue
  • Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: Mellow
    Reputation: 905
    Impact of Budget 2012-13 on Mutual Fund Industry of Pakistan
    Mutual Fund Industry of Pakistan
    The mutual fund industry has witnessed a sizable growth in the recent times where the assets under management surged to a record level of PkR 379 bn in April 2012 after rising by 14.22% MoM or PkR 47.198 bn in a month. The open ended mutual funds constitutes 92% of the total fund size while, pension funds and closed end funds contributes 7% and 1% to the fund size as at April 30, 2012.
    Major growth was observed in conventional Money Market and Income category funds registering a growth of 38.70% MoM or PkR 146.65 bn and 22.91% or PkR 86.82% MoM respectively. The mutual fund industry managed to attract more funds from the investors’ community, reflecting improved confidence and better returns from this industry.

    FY13 Budget highlights pertaining to Mutual Funds
    Recently, some changes have been proposed in the FY13 budget announcements which are directly or indirectly related to the mutual fund industry. The highlighting features of the budget 2012-13 that would impact the mutual Fund Industry are given below:

    Tax credit limit enhanced on Investments:
    The benefit of availing tax credit through investments in shares, mutual funds and insurance is proposed to enhance to 20% of the taxable income from the previous level of 15%. Simultaneously, the limit of maximum tax credit is also enhanced to PkR 1,000,000 of yearly taxable income which was PkR 500,000 earlier. The enhancement in tax credit limit would be favorable for mutual fund by would encourage investors to invest more in funds to claim higher tax shield while also earning return on investment. In addition to this, the holding period of investment in funds has also been reduced to 24 months from 36 months earlier in order to claim tax credit which is also a relief provided to the investors.

    Tax rate on dividends received by banks from its AMC:
    In order to discourage the practice of tax arbitrage by banks, it is proposed that dividends received from money market funds and income funds are to be taxed to banks progressively over a period of two years where for the tax year 2013, it is proposed to be charged at the rate of 25% and for tax year 2014 and onwards it is to be charged at 35% where as the dividend received from other sources will be charged 10%. Currently, dividend income received by banks from its assets management company is taxed at the rate of 20%. This measure is taken to discourage banks to be able to make risk free gains arising out of tax disparity by investing in income and money market funds of AMCs. However, this may result in withdrawal of investment from AMCs by banks due to which the size of AMCs may shrink.

    Provident funds investing in approved pension funds proposed tax free:
    The balance amount of provident funds invested in approved pension funds should be marked separately by pension fund managers and any withdrawal from such funds are proposed to be exempted from tax. This encourages provident funds to invest further in pension/retirement schemes.

    Payment of monthly installment:
    It is proposed that an exemption on the payment of monthly installment from an income payment plan invested, out of the accumulated balance of the individual pension account, is exempted on the condition that the accumulated balance is invested for a period of 10 years.

    Dividend Distribution of Pension Funds:
    If a pension fund has distributed its 90% of income as dividends than the income from such funds is exempted from withholding tax. Previously, the exemption certificate was required to reclaim tax benefit but now such requirements have been waived.

    Capital gain tax on disposal of securities:
    The collective investment schemes, modarabas, pension funds, income payment plans, REIT schemes, private equity and venture capital funds, approved superannuation funds, recognized provident fund and approved gratuity funds are proposed to be exempted from tax on capital gains on disposal of securities. This is done to encourage investments by the aforementioned schemes which may be directed to mutual fund industry.
    (AF)
    Click Here For: "Daily Reports From Different Brokerage Houses"


    #2
    Moon558

      Newbie

    • Starter
    • 11 posts
    • Joined 04-March 14
    Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: None chosen
    Reputation: 0
    Some impacts are useful for the monetry policy of Pakistan and some are not best.






    Karachi Stock Exchange (KSE) Daily Reports


    Top Pakistani Sites        Haroof Top Sites    Promoted at Global Promote

    Indemnity, Disclaimer & Disclosure Notice:
    • By visiting TeziMandee.com you indicate your acceptance of our Forum Rules Disclaimer & Disclosure and indemnify TeziMandee.com, its associates and related parties of all claims howsoever resulting from the usage of the forum.
    Disclaimer: Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. TeziMandee.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information.
    Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.
    • All names or products mentioned are trademarks or registered trademarks of their respective owners.

    Copyright © 2006 - 2012, TeziMandee.com All Rights Reserved.
    eXTReMe Tracker