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    Mutual Funds Back

    Basic, Benefits, Types And Taxation

    What are different types of taxes levied on Mutual Funds?

    • Capital Gains Tax - Mutual Fund investments are subject to capital gains tax. It is paid on the profit you make while redeeming / selling your Mutual Fund holdings (units). The gain is the difference in Net Asset Value (NAV) of scheme on the date of sale and date of purchase (Selling Price-Purchase Price).
    • Stamp Duty on MF Units - With effect from July 1, 2020, mutual fund units issued against Purchase transactions (whether through lump-sum investments or SIP or STP or switch-ins or Reinvestment of Income Distribution cum capital withdrawal option would be subject to levy of stamp duty @ 0.005% of the amount invested. Transfer of mutual fund units (such as transfers between demat accounts) is subject to payment of stamp duty @ 0.015%.
    • Dividend Income - In the Union Budget presented by the finance minister in February 2020, the dividend distribution tax has been done away with, whereas the dividend would henceforth be added to the taxable income of the assessee for the year. Thus, the dividends would be taxable in the hands of the recipient at the applicable tax rate.
    • Securities Transaction Tax - When an investor sells units of an equity fund in the stock exchange, or offers them for repurchase to the fund, he will have to incur Securities Transaction Tax (STT) i.e., STT is applicable only on redemption/switch to other schemes/sale of units of equity oriented mutual funds whether sold on stock exchange or otherwise. STT is not applicable on purchase of units of an equity scheme. It is also not applicable to transactions in debt securities or debt mutual fund schemes.

    What is a Mutual Fund? What is an Asset Management Company? What are the benefits of investing in Mutual Funds? Who should invest in Mutual Funds? Are there any risks involved in investing in Mutual Funds? What are the different types of Mutual funds? What are the different plans that Mutual Funds offer? Is there any minimum lock-in period for my units? What are ELSS Funds? What are Exchange Traded Funds (ETFs)? What are the factors that influence the performance of Mutual Funds? As a new investor how do I select a particular scheme? What exit load will I have to pay as on date? When will I be able to see my purchase/order details? Can I redeem my Mutual Fund investments anytime? How are Capital Gains Taxes charged?
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