Will there be TDS on SWP in Mutual fund ?

POSTED BY ragopu ON January 4, 2014 8:56 am COMMENTS (2)

Hello, I am planning to do a SWP from a scheme. The investment into the equity fund scheme was done using SIP which ended in Nov 2013. Will there be TDS on SWP? If not how do I go about calculating my tax implication? I learnt that returns on equity investments which are older than a year are tax free. How will it work in case of an SIP?

Thank you for your help!

2 replies on this article “Will there be TDS on SWP in Mutual fund ?”

  1. arjunp3000 says:

    First, if you have completed your SIPs only in November 2013 (don’t know when you started), you should ideally allow equity funds to grow for not less than 3 years. As for your question on taxes, ensure that when you do a SWP, you have completed 1 year for the units’ or sum you are withdrawing so that long-term gains are exempt. In other words, each installment of your SIP should have completed 1 year. This way you can avoid short-term capital gains tax. If you are withdrawing them within 1 year, then short-term capital gains tax will apply on a first-in-first out basis…that is units that came in first will be assumed to have been sold first.

    Regards,
    FundsIndia.com

  2. How does it matter ? There is no TDS in mutual funds . So whatever is the mechanism all you need to see if what was your profit in a year (incase you sold) and then pay tax , else its tax free (incase of equity funds)

    Manish

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