[carboy]

Originally Posted by audioholic

Guys, one clarification needed. Can I claim Income tax exemption for mutual funds in any way? I am aware of ELSS, but was wondering if I show that I have an SIP for three years or more in a certain fund, will that be valid for getting tax exemption?

No. It will not get you tax exemption.

[DigitalOne]

Originally Posted by audioholic

Guys, one clarification needed. Can I claim Income tax exemption for mutual funds in any way? I am aware of ELSS, but was wondering if I show that I have an SIP for three years or more in a certain fund, will that be valid for getting tax exemption? If this is possible, then how should I go about it? Lets say I start investing in a fund from this month. Can I declare the same for the current year?

You cannot claim tax exemption for future investments. If you start an SIP in an ELSS, in April 2019, you can claim tax exemption in Mar 2020 for completed investments.

In my organization they take investment proof till around 15th of February. So I do SIP in ELSS keeping SIP date in 1st week. So all transactions from Apr to Feb get tax benefit. I don't get tax exemption on the March investment but that's okay with me.

[carboy]

Originally Posted by DigitalOne

In my organization they take investment proof till around 15th of February. So I do SIP in ELSS keeping SIP date in 1st week. So all transactions from Apr to Feb get tax benefit. I don't get tax exemption on the March investment but that's okay with me.

Tax exemption does not depend on when your org takes proof. It depends on what investments you do by 31st March. So when you file your returns you can show the full amount.

[audioholic]

Originally Posted by DigitalOne

You cannot claim tax exemption for future investments. If you start an SIP in an ELSS, in April 2019, you can claim tax exemption in Mar 2020 for completed investments.

In my organization they take investment proof till around 15th of February. So I do SIP in ELSS keeping SIP date in 1st week. So all transactions from Apr to Feb get tax benefit. I don't get tax exemption on the March investment but that's okay with me.

Yes, i plan to begin an investment this year, and also declare it as estimation for the next years ITR. Hence, I was curious to know if this works, and if the funds are limited to ELSS or any mutual fund with a 3yr investment period works. I would obviously not want to claim this investment for returns in FY18-19.

[babhishek]

Originally Posted by audioholic

Yes, i plan to begin an investment this year, and also declare it as estimation for the next years ITR. Hence, I was curious to know if this works, and if the funds are limited to ELSS or any mutual fund with a 3yr investment period works. I would obviously not want to claim this investment for returns in FY18-19.

To answer your question - ELSS.

[DigitalOne]

Originally Posted by carboy

Tax exemption does not depend on when your org takes proof. It depends on what investments you do by 31st March. So when you file your returns you can show the full amount.

I know. But it is more convenient to do via organization .

Originally Posted by audioholic

Yes, i plan to begin an investment this year, and also declare it as estimation for the next years ITR. Hence, I was curious to know if this works, and if the funds are limited to ELSS or any mutual fund with a 3yr investment period works. I would obviously not want to claim this investment for returns in FY18-19.

Only ELSS.

[whitewing]

Originally Posted by Moto_Hill

I haven't bought any stocks via this broker and this was the last fund I invested through this or any broker. I buy directly since last three years now. All other funds via this broker do show up in CDSL.

I do check the units online and it is all good.

Have you considered switching these MFs bought via broker to direct plans? You will see atleast 0.5% difference in the expense ratios, which will end up as a tidy sum over the years.

[thoma]

Originally Posted by whitewing

Have you considered switching these MFs bought via broker to direct plans? You will see atleast 0.5% difference in the expense ratios, which will end up as a tidy sum over the years.

Can I 'switch' from regular to direct plan? Won't the broker object? Switching is equivalent to redeem and then buy right? Can I switch to another fund of the same fund house without routing the money through the bank?

[whitewing]

Originally Posted by thoma

Can I 'switch' from regular to direct plan? Won't the broker object?

This is a decision upto you, the broker has no part in this.

For managing mutual funds I switched from ICICI Direct to an app called Piggy, and it was a hassle free experience. Though I had to do a KYC by sending photos of the signed copy of KYC form.
After that I just chose "switch to direct plan" via the app and it was done in a couple of days.
I guess the same is possible via other MF apps/via MFUI. The only caveat is that the fund house should be listed in MFUI.

Originally Posted by thoma

Switching is equivalent to redeem and then buy right?

Yes, As you rightly mention this switch will be treated as a sale & purchase, so taxation does apply.

Originally Posted by thoma

Can I switch to another fund of the same fund house without routing the money through the bank?

I do not know if this is possible, sorry.

Alternately see this link to do it via fund hoses (I have not tried this route)
https://www.moneycontrol.com/news/bu...n-2321925.html

[altius]

Yes. You can switch to an other fund from same fund house. basically the fund house redeems the amount from the source fund and invests into the target fund. The bank is not involved. There may be a few days gap between the date of selling in the source fund and date of buying in the target fund.

Originally Posted by thoma

Can I switch to another fund of the same fund house without routing the money through the bank?

[DigitalOne]

Worries about the prospects of debt mutual funds holding securities of Subhash Chandra’s Essel Group entities have resurfaced after Kotak Mutual Fund delayed full redemption in several fixed maturity plans (FMPs), sparking a scramble among investors to check if they too have any exposure to such paper.

Read more here

[SmartCat]

Till debt mutual funds put their houses in order, it is best to stick to overnight funds (short term) and gilt funds (long term). It might take a couple of years for fund houses to figure out how to properly manage credit risk and returns.

Some smart gilt fund managers have returned 10% per year over 10+ years - with zero credit risk and low volatility. They manage to get higher returns than fixed deposits by "managing" the inverse relationship between bonds and interest rates. That is, when interest rates are falling, they move to long term government bonds. When interest rates are rising, they move to short term government bonds (3 to 6 months duration).

[C300]

Originally Posted by SmartCat

Till debt mutual funds put their houses in order, it is best to stick to overnight funds (short term) and gilt funds (long term). It might take a couple of years for fund houses to figure out how to properly manage credit risk and returns.

Some smart gilt fund managers have returned 10% per year over 10+ years - with zero credit risk and low volatility. They manage to get higher returns than fixed deposits by "managing" the inverse relationship between bonds and interest rates. That is, when interest rates are falling, they move to long term government bonds. When interest rates are rising, they move to short term government bonds (3 to 6 months duration).

Thanks SmartCat.
The Banking and PSU Debt funds have been falling for past few days. Any particular reason for the fall.

[SmartCat]

Originally Posted by C300

Thanks SmartCat. The Banking and PSU Debt funds have been falling for past few days. Any particular reason for the fall.

Banking and PSU debt funds are pretty decent too, because they have low credit risk. They are suitable for medium term investing (1 to 3 years holding period). Unfortunately, some of these funds invested IL&FS by classifying it as a PSU.

But the recent minor fall in these funds is 'normal'. These funds have some volatility - so make sure your holding period is 1 to 3 years (or more).

[DigitalOne]

Originally Posted by SmartCat

Some smart gilt fund managers have returned 10% per year over 10+ years - with zero credit risk and low volatility. They manage to get higher returns than fixed deposits by "managing" the inverse relationship between bonds and interest rates. That is, when interest rates are falling, they move to long term government bonds. When interest rates are rising, they move to short term government bonds (3 to 6 months duration).

I have re-entered the Gilt fund category in the last few weeks(by investing part of my annual bonus), seeing that RBI has started to reduce the interest rates. Keeping my fingers crossed hoping that the low inflation regime continues for some more time and RBI keeps reducing interest rates. Oil prices in the international market is worrying though. Domestic prices will be increased in one shot once elections get over.