You’ve surely heard of Systematic Investment Plans (SIPs) - they've become increasingly popular among investors because they're easy to use and have the potential for wealth accumulation. SIPs are offered by mutual funds, which provide diversified portfolios managed by professionals. This makes mutual fund SIPs an excellent choice for regular investing to meet your financial goals. Just keep in mind that there are tax implications associated with SIPs that you should consider.
Instead of investing all at once, you can invest in mutual funds at regular intervals. These intervals are called SIPs. This approach has one main advantage: when investing in one go, you cannot be sure if you're getting the best price for the mutual fund units. Instead, if you invest in instalments over a period of time (days, weeks, or even months), you are essentially investing the same total amount divided over time. This ensures that the overall price paid for the mutual fund is averaged over the entire investment duration.
Here's how you can avail tax exemptions on Equity Mutual Funds.
Here’s a table containing all the taxation details about different types of mutual funds:
Please note that the tax rates provided here may be subject to change. It's always recommended to consult with a tax professional or refer to the latest tax laws and regulations for accurate and up-to-date information.
This provision is meant to prevent inflation from reducing the value of your assets over time. This benefit is called 'Indexation' and is provided by Income Tax laws. Essentially, you are allowed to adjust the purchase price of your asset based on the rate of inflation notified by the government.
Here’s a closer look at the tax rates of different income slabs:
SIPs are a great option for regular investing to meet financial goals. They are easy to use and provide the potential for wealth accumulation. However, it's essential to consider the tax implications of SIPs. Taxes are levied on different types of mutual funds used in SIPs, and the gains made from them determine how much tax is due. It's always recommended to consult with a tax professional or refer to the latest tax laws and regulations for accurate and up-to-date information.
At Fi, we believe in making investing in mutual funds easy and hassle-free. That's why we offer commission-free investments and have re-imagined SIPs to make them more flexible and suited to your needs. You can now invest every time you shop online or order food on Swiggy/Zomato, in addition to regular daily SIPs. Our intuitive user interface is designed to cater to both novice and seasoned investors, and we have a wide selection of over 900 direct Mutual Funds to choose from. Rest assured that investing with Fi is 100% secure, as we are guided by epiFi Wealth, a SEBI-registered investment advisor. You can invest daily, weekly, or monthly via automatic payments or SIPs with just one screen tap, and you don't have to worry about missing payments as we offer 100% flexibility with zero penalties.
Yes, taxes are levied in India on SIPs. The sort of mutual funds used in SIPs and the gains made from them determine how much tax is due.
Yes, returns from mutual fund investments are taxable. But the tax rates on these investments vary across different mutual funds.
In India, a flat tax rate of 15% is levied on the withdrawal of mutual fund investments, regardless of an individual's income tax bracket. This tax applies to both equity and debt mutual funds.
In India, if your long-term capital gains from equity mutual funds are below ₹1 lakh, you don't have to pay any taxes on them. However, if they exceed ₹1 lakh in a single year, you would have to pay a 10% tax on the gains that are above the threshold.