Under the applicable tax laws, no tax is applicable on returns if an investment in a mutual fund is held for more than one year. This is not the case with investments in bank deposits and other fixed income instruments (TFC’s, Treasury Bills, Sukuks, Commercial Paper, etc. all) as they are subject to taxation.
Any individual who invests in a Lakson Fund is eligible for a tax credit. The tax credit can be as high as PKR 100,000 for a salaried individual and PKR 125,000 for a self employed individual on an investment of PKR 500,000.
To gain the credit the investor must maintain the investment for three years.
Below is a table showing the tax credit according to the tax bracket and type.
| Salaried tax payer | |||||
| Annual Taxable Income (Rs.) | 500,000 | 1,000,000 | 2,000,000 | 4,000,000 | Exceeding 4,550,000 |
| Tax Rate Applicable | 3.50% | 9.00% | 15.00% | 18.50% | 20.00% |
| Amount Invested in Lakson Funds (Rs.) | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 |
| Amount on which tax credit is applicable | 75,000 | 150,000 | 300,000 | 500,000 | 500,000 |
| Tax Credit (Rs.) | 2,625 | 13,500 | 45,000 | 92,500 | 100,000 |
| Self employee tax payer | |||||
| Annual Taxable Income (Rs.) | 500,000 | 750,000 | 1,000,000 | 1,500,000 | Exceeding 3,333,333 |
| Tax Rate Applicable | 7.50% | 10.00% | 15.00% | 20.00% | 25.00% |
| Amount Invested in Lakson Funds (Rs.) | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 |
| Amount on which tax credit is applicable | 75,000 | 112,500 | 150,000 | 225,000 | 500,000 |
| Tax Credit (Rs.) | 5,625 | 11,250 | 22,500 | 45,000 | 125,000 |
Please consult your tax advisor for your individual tax return as your situation may vary.
