Tax on STP – Transfer from Debit fund to Equity Fund

POSTED BY Happyinvest007 ON December 2, 2014 5:03 pm COMMENTS (5)

Hi,

I’m planning to invest in Mutual Fund via STP (money transfer from Debit Fund to Equity Fund). As per recent tax chanrges for Debit fund, there will be tax implication if amount withdraw before 3 years.

However in STP, the amount will be debited from debit fund and credited to equity fund so is above taxation applieshere too? Please clarify if any other charges are there for STP?

Thanks!

5 replies on this article “Tax on STP – Transfer from Debit fund to Equity Fund”

  1. Hemanth says:

    Yes, it will be applicable.

    As STP will be considered as redemption from debt fund and investment into equity fund.

    1. Happyinvest007 says:

      Thanks Hemanth for response.

      can you also let me know then how STP is feasible if taxation imposed on it. How much tax applied on it?

      1. Ajay says:

        If the switch happens before 3 years then the gains should be added to your income and taxed as per slab.
        If the switch happens after 3 years then you need to pay 20% after indexation

        1. Happyinvest007 says:

          Then there is no difference between FD and STP when we talk about TAX?

          is it correct?

          1. Hemanth says:

            yes, before 3 years, there won’t be much difference.

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