Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

Twin blows blunt debt funds' edge over FDs





Mutual funds' home run with fixed income schemes, especially fixed maturity plans (FMPs), could well be over.

With the finance minister (FM) doubling the long-term capital gains tax on MFs other than equity-oriented funds to 20% and trebling the holding period to three years, FMPs would lose their sheen.

Capital gains arising on transfer of debt MF units held for more than a year is currently taxed at a concessional rate of 10% whereas direct investments in banks (including fixed deposits --FDs) and other debt instruments attract a higher rate of tax.

"This allows tax arbitrage opportunity . This arbitrage has hardly benefited retail investors as their percentage is very small among such mutual fund investors," the FM said.

FMPs accounted for bulk of the mobilization made by MFs over the past few years.

FMPs see more interest in the early part of the year, especially in March, as investors would be able to avail double indexation benefits during this month. In all, 500 FMPs collected Rs 32,723 crore in March, accounting for 89.2% of the money mobilized by MFs during the month.

FMPs will lose their attractiveness. The size of inflows and one-year FMPs would come down as it was a pure arbitrage opportunity.

The Budget has done away with the method of dividend distribution tax being paid on the income distributed net of taxes. The arbitrage available has been removed. This would increase the effective tax (on debt MFs) from around 24% to 30.

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

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Franklin India Bluechip
4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
4. Birla Sun Life Front Line Equity Fund
5. Franklin India Prima

C. 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
5. Birla Sun Life Dividend Yield Plus
6. SBI Emerging Businesses Fund
7. HDFC Mid-Cap Opportunities Fund
8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
2. Franklin India Smaller Companies

E. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund
4. Birla Sun Life Gold

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