Prajna Capital |
- Long term Debt Mutual Funds more tax efficient than Bank FDs
- HDFC Click2Protect Plus
- LIC NOMURA MF DIVERSIFIED EQUITY FUND SERIES 1
| Long term Debt Mutual Funds more tax efficient than Bank FDs Posted: 06 Aug 2014 12:09 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Long term Debt Mutual Funds more tax efficient than Bank FDs
They continue to enjoy a significant tax advantage over fixed deposits and bonds
Investors in short term debt funds may be ruing the changes in tax rules but long-term investors have plenty to smile about.
They are still eligible for a tax bonanza, thanks to the indexation benefit available on investments of more than three years. If you invested in a 3-year FMP in 2011 and earned a return of 9.5%, you will have to pay a paltry tax of 0.56% on the gains. High inflation in the past few years has reduced the tax payable on gains from debt funds to almost nil. No tax is payable even if the debt fund you bought in 2009 has earned 10% returns.
After the budget changed the rules for non-equity mutual funds, several fund houses junked their plans to launch one and two-year FMPs. Some even returned to investors the money collected during recently closed NFOs of one-year schemes. These have now been replaced by 3-year FMPs on the market shelves. At least three 3 year FMPs closed last week and eight others are currently on offer
Experts say that given the high bond yields, one can expect a pre-tax yield of over 9% from these FMPs.
The interest on fixed deposits is fully taxable. It is added to the income of the investor and taxed as normal income. For those with a taxable income of over Rs 10 lakh a year, the tax is 30%. In stark comparison, the effective tax on the gains from a 3-year FMP is less than 2% if you assume a modest inflation of 9% (see graphic).
Though FMPs can give higher post-tax returns, they don't score very well on the liquidity front.
But this exit route is only a theoretical possibility. In reality, there are hardly any FMPs traded on the exchanges. According to Value Research, during 2013, only eight of the 700 FMPs available in the market were traded on the BSE on 20 days.
On the other hand, an increasing number of banks is not levying any penalties on premature withdrawal of fixed deposits. The State Bank of India, for instance, does not charge any penalty on premature withdrawals from short-term deposits of Rs 15 lakh and above after seven days. In cases of tenure of more than one year, there is a small penalty. The deposit earns 0.5% below the rate applicable for the period the money remained with the bank or 0.5% below the contracted rate, whichever is lower.
Experts say this makes bank FDs a better proposition for those in the lower tax brackets. The tax on FMPs will only be marginally lower and not make a significant difference for someone whose earns less than Rs 5 lakh a year. Even though the tax will be higher on FDs, they will offer greater liquidity to the investor.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF | ||||||||
| Posted: 05 Aug 2014 10:13 PM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300 HDFC Click2Protect Plus
New Version of CLick2Protect as "plus" option is been launched as of 4th Aug 2014. HDFC Click2Protect Plus Has 4 options - 1 life option 2 extra life option 3 income option 4 income plus option HDFC Click2Protect Plus with option to pay premium - Regular premium pay Limited premium pay Single premium pay Age covering till 75. last age at entry 65.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF | ||||||||
| LIC NOMURA MF DIVERSIFIED EQUITY FUND SERIES 1 Posted: 05 Aug 2014 08:02 PM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300 LIC NOMURA MF DIVERSIFIED EQUITY FUND- SERIES 1
1. The date of NFO i.e. opening date and closing date of NFO :- New Fund Offer Opens on : 19-08-2014.
New Fund Offer Closes on : 02-09-2014. 2. The allotment date : 09-09-2014. 3. The scheme maturity date and tenure of the scheme :- Tenure of the scheme is 1100 Days from the date of allotment.
Maturity Date :- 12-09-2017. 4. Type of scheme :- A close ended equity scheme
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
| You are subscribed to email updates from Prajna Capital - An Investment Guide To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment