LTCG & SWP/MIP – MF

POSTED BY Rajesh ON May 21, 2011 9:45 pm ONE COMMENT

Hi,

I want to understand following:

1. MF Taxation u/s 112(1) states that “With effect from April 1, 2000, Long-term Capital Gains on sale of units of mutual funds to be taxed @ 10% without indexation benefit or @20% with indexation benefit, whichever is less.”. What is difference between w indexation & w/o indexation?

2. Do SWP and MIP are interchangeable terms?

3. Does SWP is a better option than one time complete redemption?

thanks.

One reply on this article “LTCG & SWP/MIP – MF”

  1. 1. MF Taxation u/s 112(1) states that “With effect from April 1, 2000, Long-term Capital Gains on sale of units of mutual funds to be taxed @ 10% without indexation benefit or @20% with indexation benefit, whichever is less.”. What is difference between w indexation & w/o indexation?

    Reply: With time property appreciates and so does inflation. In short to give the benefit to investor in face of inflation indexation comes in picture. You save on tax when you apply indexation and take a call.

    2. Do SWP and MIP are interchangeable terms?

    Reply: SWP applies to MIP for you to get regular income.

    3. Does SWP is a better option than one time complete redemption?

    Reply: It is not better it is a facility you can take benefit of. Instead of full redemption you can take money in parts so that rest of money stays invested

    nandish

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