Is STP from liquid fund taxable?
Taxation on STPs The redemption is usually taxable. The money transferred within the first three years from a debt fund is subject to short-term capital gains tax (STCG). But even with this tax aspect, the returns earned would be higher than those in a bank account.
Can I do STP from one fund house to another?
Investors switch their investment from one open ended scheme to another within the same fund house for better financial planning. To switch within the same fund house, fill up a switch form specifying the amount/no. of units to be switched from the source scheme and name of the destination scheme.
Which fund is best for STP?
So, it would be better to invest the lump sum in a low-risk debt fund and then schedule an STP to equity funds of your choice. However, investors should check the exit load charge imposed by the mutual fund houses if the money is withdrawn before certain specified intervals, generally one year for equity funds.
Can I have 2 ELSS?
You can invest up to ₹1.5 lakh in a financial year to get a deduction under Section 80C. Experts advise that instead of investing in too many ELSS funds, investors should look at diversified equity funds that don’t come with any lock-in.
How are STP taxed?
Tax Treatment of STP. In case of equity funds, transfers within 1 year of purchase will be taxed under the Short Term Capital Gains Tax (STCG) at 15\%. Transfers after 1 year, more than Rs 1 lakh will be taxed under the Long Term Capital Gains Tax (LTCG) at 10\%.
How do I transfer money from one mutual fund to another?
To transfer your mutual fund and other investment holdings, set up a new brokerage account and complete the account transfer request form. The transfer form will ask you where your mutual fund shares are held, at the brokerage or at the mutual fund company.
Is STP possible in Zerodha?
How to set up a Systematic Transfer Plan through an app like Groww, ETMoney, Zerodha, Kuvera and the likes – Quora. There is an option in drop down menu on your Left Hand Side which after clicking gives option TRANSACTION. Click on STP. Fill in the form accordingly and submit.
What are STP charges?
In case of equity funds, transfers within 1 year of purchase will be taxed under the Short Term Capital Gains Tax (STCG) at 15\%. Transfers after 1 year, more than Rs 1 lakh will be taxed under the Long Term Capital Gains Tax (LTCG) at 10\%.
Can we switch from one ELSS funds to another?
ELSS mutual funds have a mandatory lock-in period of 3 years. You can switch from the regular plan of an ELSS mutual fund to the direct plan after the lock-in period of 3 years. This means that switches and redemptions are not permitted before 3 years.
How many tax saving ELSS mutual funds should you have in your investment portfolio?
An ELSS fund usually invests in 50-70 stocks and having two such funds in your portfolio out to cover the diversification needs, say experts.
Is the first time subscription offer for a new scheme launched by the asset management company?
new fund offer (NFO)
Definition: A new fund offer (NFO) is the first time subscription offer for a new scheme launched by the asset management companies (AMCs). A new fund offer is launched in the market to raise capital from the public in order to buy securities like shares, govt. bonds etc. from the market.
Are mutual fund transfers taxable?
Do I have to pay taxes on mutual fund earnings? Generally, yes, taxes must be paid on mutual fund earnings, also referred to as gains. Whenever you profit from the sale or exchange of mutual fund shares in a taxable investment account, you may be subject to capital gains tax on the transaction.
What is an STP and how does it work?
Typically, an STP is used to transfer money between liquid or debt fund to an equity fund. This averages out an investor’s buying price in the equity fund and reduces his or her risk.
How much tax do you pay on STPs?
However, the returns/gains in such funds are also around 6-8\% and hence the actual tax payable from STPs is not large. Each STP transfer is taken as part capital and part income as per the First-in-First-Out (FIFO) system of accounting.
Should I do STP on equity funds?
However, you need to be cautious about doing STP on equity funds when held for less than 1 year. The redemption attracts 15\% STCG tax and that adds to your cost. Also most equity funds will charge you exit load if redeemed within 1 year.
Does exit load apply to STP transfers made before the exit load?
Hence it will apply to STP transfers made before the exit load period as well. However, there is no exit load on liquid funds and most STPs transfer money from a liquid fund to an equity fund, thereby avoiding exit load.