Audited Account Statement for PMS Investors
A PMS (Portfolio Management Service) is generally treated as a pass-through investment structure for tax purposes. This means that the income and capital gains arising from the investor's portfolio are ultimately taxable in the hands of the investor, and the investor is responsible for reporting the relevant income in their Income Tax Return (ITR).
At the end of the financial year, the investor may receive an audited account statement or tax statement from the Portfolio Manager. This statement provides a consolidated summary of the transactions and taxable income generated during the year and helps the investor or their tax advisor accurately prepare and file the ITR.
Simple Illustration
Suppose an investor has invested ₹50 lakh in a PMS during the financial year.
During the year, the PMS portfolio generates:
- Capital Gains: ₹5 lakh
- Dividend/Other Income: ₹50,000
The Portfolio Manager provides the investor with the relevant account and tax statements at the end of the financial year.
The investor uses these details to report the applicable income and gains in their ITR and pays tax as per the applicable tax laws.
In Simple Terms
PMS manages your investments, but the tax liability arising from your investments ultimately belongs to you as the investor. The audited account statement and tax-related reports provided by the PMS help you and your tax advisor correctly determine and report your taxable income.
Important: The exact tax treatment depends on the nature of income, transaction details and applicable tax laws. Investors should consult their tax advisor for their specific tax filing requirements.
For more information on taxation and audited statement, write to us at info@pmsinsights.in