If you're looking for income tax, Here's detailed article on income tax on Mutual fund gains.
What are the other types of Taxes that are applicable for Income Tax?
1. Brokerage charges
Mutual funds are usually bought in two ways.
a. Regular
Prior to 2013, Regular was only way to buy mutual funds where you buy funds through third party broker and you pay certain percentage of profit to the broker (Usually 1% of invested amount per year)
Regular Mutual funds investing still exists but losing customers to Direct mutual funds at fast pace.
b. Direct- Recommended
You can buy mutual funds directly from the AMCs with no third party involved. New age mutual fund platforms like Paytm money and Groww allows this type of investment.
Users can buy and sell Mutual funds in these platforms with absolutely no price. But Mutual Fund AMCs are charged small amount each time user purchases their fund.
If you're opting for Direct Mutual funds, there'll be absolutely no brokerage charges.
2. TDS on Dividends
Dividends has 10% TDS (Tax deducted at source) charges if mutual fund dividends in financial year exceeds 5,000 INR
Suppose 6000 is the dividends received, 10% of (6000-5000)= 100 is the TDS.
This tax is deducted automatically in your dividends.
3. Securities Transaction Tax (STT)
0.001% of the amount you take out of the equity mutual fund is charged for security transaction tax
There's no STT for Debt Mutual funds.
4. Exit Load
Exit Load is fee charged for withdrawing the mutual fund before the specified period of time.
Exit Load and the time depends on specific Mutual fund. This will be auto deducted when you take out the fund before the specified period.
Suppose 1% is exit Load, 1year is the specified time by AMC, You invested 1L, took out the mutual fund when it grew to 1.5L within 6 months. That's less than the specified period.
So exit Load of 1% of final amount that's 1% of 1.5L, that's 1.5K is deducted as exit Load. You would get 1.485L as final amount.
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