Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Thursday 22 August 2013

Switching Mutual Funds

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

THERE are various implications for an investor when they switch their mutual fund units from one fund to the other. While the performance impact and the expectation for growth is one thing, there is also the tax implication that this move will bring along. This might seem to be surprising for a lot of people but it is a vital factor that needs to be taken into consideration by the investor while undertaking any such plan. Here is a look at the issue and what the investor can do when faced with such a position.

Switch:

There can be different kinds of switch requests made by an investor.

One is the switch between two funds from the same fund house, whereby, the investor moves money from one to the other. The other way in which the switch is undertaken is when the amount is moved from one option of the scheme to the other. This can be something from the dividend option to the growth option, or even from the normal plan to the direct plan. There are various choices that the individual can exercise and it can lead to several possibilities that need to be taken into consideration.

Meaning:

When the switch is made, the meaning of the entire move has to be understood. This is important because the implication of the move will also be impacting several other areas. On one side, the choice is very clear for the investor because it means shifting from an investment choice to some other one where they would have the kind of exposure that they actually require. This is the basis for making the entire transaction and hence, is a vital factor.

Thus it could just be a switch between different plans in a fund and for the investor this is just a matter of convenience and not anything else because the entire investment remains the same. For the tax purposes, however, any such change actually means that the investor has sold one investment and then made an entry into another one so there is a larger implication to the entire move.

Impact:

The key impact of this entire situation is that when the investor does make such a move, the first thing that will be impacted is the tax working. The investor has to ensure that they calculate the capital gains or loss that has been incurred on the initial investment. This means checking the time period for which the investment was actually held to determine the nature of the capital gain or loss and then looking at the actual figures to see whether there is a loss or gain.

The problem in such a situation is that the investor might suddenly find that they have made a transaction that puts a tax liability on them and hence, there is a tax amount to be paid. This would happen especially when there is a transfer of amount from a debt fund to another debt or equity fund. The actual amount of the investment remains with the fund so there is no change here but this does not prevent the rise of a capital gain and tax implication, which could end up impacting the cash flow for the individual. The cash position is impacted because they have to shell out the tax even when the amount of investment remains with the fund. The calculation of the overall position and the manner in which this will impact their finances is something that they need to look at.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

No comments:

Post a Comment

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Popular Posts