Service tax of 10.30% to be deducted from transaction charges
Mumbai: Distributors need to make up their mind if they wish to charge or let go the transaction charges. They will have to notify CAMS which is tasked for processing the data at the CAMS Point of Service by October 21, 2011. AMFI is yet to finalize the date from which the transaction charges will be implemented.
AMFI has decided to accept the applications of only those distributors who are KYD compliant. Non KYD distributors neither get the commissions nor are they eligible for a transaction charge.
A transaction charge of Rs. 150 will be charged to first time investor in mutual fund and Rs. 100 for existing investors. For SIP applications of Rs. 10,000 or above transaction charge will be paid in four equal installments starting from the 2nd to the 5th installment.
A service tax of 10.30% will be deducted from the transaction charges. Thus Rs. 89 will be paid out to distributors for existing investments and Rs. 139 for new investors after deducting the service tax.
Distributors have an option to change their status (opt in/opt out) twice in a year i.e. between March 1st to March 25th and September 1st to September 25th.
As reported by Cafemutual earlier, transaction charges will not be applicable for applications routed through the stock exchange route.
