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In the purview of the COVID-19 pandemic outbreak, the world is currently facing several economic disruptions. However, the current lockdown situation brings the following seven positives with itself to help one set the financial management plans upright. 

While creating an investment portfolio, it helps to know the tax incidence of different investments. It is usually advised to compare investments in terms of post-tax returns instead of absolute returns. This article discusses key information related to tax on mutual funds in India.

Below are the provisions on taxation on mutual funds:

Benjamin Graham, one of the early followers of fundamental analysis based investing and also Warren Buffett’s professor, had propounded the concept of Mr. Market way back in the nineteen forties to describe the contradictory and irrational traits of investors. Graham described Mr. Market as an investor prone to erratic swings of pessimism and optimism and since majority of the stock market is comprised of such investors, he felt that the market as a whole takes on these characteristics. His advice was that while Mr.

All mutual funds houses undertake KYC (Know Your Customer) compliance in pursuance of the Prevention of Money Laundering Act, 2002, and SEBI (Securities & Exchange Board of India) guidelines. This process is made mandatory by the market regulator so that the transactions are seamlessly linked to the investor. Since PAN is the compulsory document towards Proof of Identity, it serves as a unique link for the stakeholders concerning all the transactions in the financial markets, be it with stockbrokers, depository participants or mutual funds, etc. 

Floater Rate Fund is an open-ended debt scheme predominantly investing in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/ derivatives). These schemes will invest at least 65% of its net assets in floating rate instruments. 

A Corporate Bond Fund is an open-ended debt scheme predominantly investing in AA+ and above rated corporate bonds. Minimum investment in corporate bonds – 80% of total assets (only in AA+ and above rated corporate bonds. Corporate Bonds are one of the predominant sources of funds for the companies willing to borrow from the market, apart from the borrowings from banks and financial institutions. 

March 2020 was one of the worst months for equity market. Indian indices witnessed massive sell-off in line with global equities sparked by the COVID-19 pandemic and potential economic damage amid lock-down worldwide. Large cap based index, Nifty 50 dropped by over 23% and broad-based index, Nifty 500 fell by a little over 24%. Mid cap and Small cap benchmarks vis., Nifty Midcap 100 index fell over 30% and Nifty Smallcap 100 index dropped by over 36%.

National Pension Scheme (NPS) was launched by the Government of India to create a social security mechanism for all Indians. NPS seeks to fill the gap with regards to creating a retirement corpus, wherein the subscribers cannot generally withdraw before retirement. Further, a part of the accumulated corpus at the time of the retirement must be mandatorily invested to buy an annuity to ensure regular income post-retirement.

Back in my school days I used to mug up reams and reams of chemical formulas, not knowing if I would ever use them in the future. In the investing world those esoteric formulas, now seem rather meaningless. However, one concept that is still stuck in my head is that of an Isotope which I likely encountered in Class IX or X. The concept of ‘elements’ is the very foundation of Chemistry. An Isotope of an element is a similar atom with same number of protons but different neutrons.

Mutual funds have emerged as a preferred investment option among retail investors due to the benefits of professional fund management and ease of investing. As a new investor, many people have this question in mind - how do mutual funds work? What do Asset Management Companies (AMCs) do with the small investments that individuals provide?