Section 10(35)
Exemption of income from Mutual Funds
Quick Answer
Section 10(35) (Exemption of income from Mutual Funds) has been deleted under the Income-tax Act, 2025, effective 1st April 2026.
What changed for Section 10(35)
The starting point is Section 10(35) of the Income Tax Act, 1961 — exemption of income from mutual funds. Income received from units of a Mutual Fund was exempt.
Under the Income-tax Act, 2025 (effective 1st April 2026), this provision has been deleted — there is no successor section carrying it forward. NA. Deleted alongside 10(34). Distributions from Mutual Funds are now fully taxable.
The transition impact on Section 10(35) is assessed as High. Changes how mutual fund dividends are planned.
Sec 10(35)
Provision Summary
Income received from units of a Mutual Fund was exempt.
Deleted
Provision Summary
NA. Deleted alongside 10(34). Distributions from Mutual Funds are now fully taxable.
Key Changes & Highlights
- Mutual funds now deduct TDS under Section 194K before payout.
Related Sections
Frequently Asked Questions
Which subject does Section 10(35) of the 1961 Act cover?
Section 10(35) of the Income Tax Act, 1961 covers exemption of income from mutual funds. Income received from units of a Mutual Fund was exempt.
Is Section 10(35) of the ITA 1961 still applicable under the Income-tax Act, 2025?
Section 10(35) has been deleted under the Income-tax Act, 2025, with no successor section carrying it forward from 1st April 2026. NA. Deleted alongside 10(34). Distributions from Mutual Funds are now fully taxable.
How does the Income-tax Act, 2025 affect Section 10(35) in practice?
The transition impact for Section 10(35) is rated High. Changes how mutual fund dividends are planned.
What is new about Section 10(35) under the Income-tax Act, 2025?
Mutual funds now deduct TDS under Section 194K before payout. These points are specific to Section 10(35) (Exemption of income from Mutual Funds).
Disclaimer: This mapping of Section 10(35) (Exemption of income from Mutual Funds) under the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 10(35) is currently marked Deleted, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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