In Budget 2018, Long term capital gains tax on equity mutual funds was introduced. Prior to the change, the LTCG on sale of equity mutual funds was exempt from tax. This change brought an interesting taxation arbitrage. Taxation of maturity proceeds from Unit Linked Insurance Plans (ULIPs), offered by insurance companies, was left untouched and the maturity amount from ULIPs … [Read more...] about Tax-Free ULIPs vs. Mutual Funds with LTCG tax: Which is better?
There was a happy surprise for investors in Franklin Ultra Short Bond Fund recently. In January 2020, the AMC had side-pocketed its investments in Vodafone Idea bonds. In June 2020, Vodafone Idea made interest payment on these bonds and you would have received some payment. On July 10, 2020, the 8.25% Vodafone Idea Ltd. bond matured, and Franklin schemes received the … [Read more...] about Franklin Debt MF: Vodafone Idea Payment (Segregated Portfolio): How will it be taxed in your hands?
I have written about side-pocketing of debt mutual fund in a previous post. We discussed the pros and cons. One topic we didn’t discuss in that post was the taxation of proceeds from side pockets or segregated portfolios. In this post, we take a stepwise approach to understand how proceeds from MF side pockets or segregated portfolios are taxed. If you were an investor in … [Read more...] about How Mutual Fund Sidepockets are taxed?
The Reserve Bank of India has released the calendar for the Sovereign Gold Bond Scheme, 2020-2021 for the last 6 months of FY2021. The Bonds will be available for subscription in 6 monthly tranches from October 2020 to March 2021. For the tranche that is now open for subscription in January 2021, the subscription price is Rs 5,104 per gram. For online subscription, there … [Read more...] about Sovereign Gold Bonds 2020-2021: Should you invest?
Moving abroad for employment or planning to shift back to India permanently? How will your income be taxed? Can you continue holding NRE deposit and continue to get tax-free interest? Well, everything begins with finding out whether you qualify as an NRI or a resident. And this may not always be easy. To add to the confusion, the definition of Non-resident is different under … [Read more...] about Who is NRI as per FEMA and Income Tax Act? (Latest Rules)
The current market crash has been very painful. Equity portfolios have taken deep cuts. During such times when we are so occupied with limiting losses in our equity portfolios, we might lose out on peculiar tax-saving opportunities that these times may throw up. I am talking about tax-loss harvesting, where you can use losses from one capital asset to set off capital … [Read more...] about Market Crash: Use Tax Loss Harvesting to Reduce your Tax Liability
The Union Budget 2020 gave a choice of tax regime to the taxpayers. Continue with the old tax regime and keep taking tax deductions. OROpt for the new tax regime (lower taxes) but don’t take tax deductions As a taxpayer, you can calculate tax liability under both the regimes and opt for the one with a lower tax liability. Under the new tax regime, all the common … [Read more...] about You can take this Tax Benefit even under the New Tax Regime
The Union Budget 2020 changed the way how dividends from mutual funds will be taxed. The following are the changes. Till FY 2020, dividend from mutual funds was exempt from tax in the hands of the investor. However, before paying the dividend to you, AMCs used to deduct Dividend Distribution Tax (DDT) before paying such dividend to you. The effective impact of DDT was 11.46% … [Read more...] about Mutual Funds: With Tax on Dividends, The Choice between Growth and Dividend?
The Finance Minister presented the Union Budget 2020 on February 1, 2020. Here are the key hNew Taxighlights of the Union Budget from personal tax perspective. There have been quite a few changes this time around. Therefore, I have divided the post into 5 broad sections. Change in Income Tax SlabsChange in Mutual Fund Taxation (includes dividend taxation and … [Read more...] about Budget 2020: New Tax Slabs, Tax on Dividend, Employer Contribution to NPS/EPF And Some Mess for NRIs
You are still young and want to start saving for your retirement. You want to ensure that you get a regular income after retirement. For this reason, you want to invest in a pension plan. Which pension plan do you pick up? There is NPS (National Pension Scheme) and there are several pension plans from the insurance companies. Which one would you pick? In a pension … [Read more...] about NPS vs Pension Plans from Insurance Companies: Which is better?