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ELSS (Equity Linked Savings Scheme) has been one of the available investment options under Section 80C, which allows a tax benefit of investment up to Rs. 1.50 lakh in a financial year. Further, besides the tax benefit, the taxpayers can also invest in ELSS to club their financial goals and tax plans. 

Mutual funds offer a wide range of investment options to the investors, to suit different risk profiles, investment horizon, and financial goals. An investor may choose to invest in equity schemes, debt schemes, hybrid schemes, solution-oriented schemes, index funds, etc. as per their financial plans. One of the primary financial goals for a parent is planning for their child’s education. With high emotional value attached to this goal, one always intends to plan the best for his/ her children. 

The Hon’ble Finance Minister presented the Union Budget 2020 on 1st February 2020, which has proposed specific changes to the present income tax rates, which will be applicable for the financial year 2020-21 and subsequently, Finance Act 2020 has also been enacted. However, the new tax rates carry certain caveats before the taxpayers can adopt the reduced rates. As such, both the existing & new tax rate structures will continue to co-exist. 

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. 

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.