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Old 10th January 2023, 14:13   #4321
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Re: The Mutual Funds Thread

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Originally Posted by saket77 View Post
It is possible but I do not see any advantage. On the contrary, this is an unnecessary complication in my view, and leads to more problems than solution. Just curious to ask, why do you want to go through this route?
Apart form the emotional benefits, the real benefit is for long-term investments. If you don't plan to withdraw for long, the investments go to the child once they cross the legal age (18) and hence subsequent tax liabilities will be with them and not with the parents.
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Old 11th January 2023, 10:08   #4322
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Re: The Mutual Funds Thread

For my son (minor), I had done an SIP in PPFAS in 2022. Unfortunately due to existing relationship with FundsIndia, somehow PPFAS only gave me option of regular plan when investing directly on PPFAS's website. I did not notice that and then got stuck.

Recently I called the customer support to figure out if I can switch from regular to direct plan and they said that I should try with MFCentral.

I did that and in one day itself I got switched from regular to direct.


Now I plan to do the same process for all the old regular MFs for my son.

Is there a catch somewhere in doing this switch? Assume investments are several years old so no exit load.
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Old 11th January 2023, 10:41   #4323
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Re: The Mutual Funds Thread

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Originally Posted by S_U_N View Post
..
I did that and in one day itself I got switched from regular to direct.
Now I plan to do the same process for all the old regular MFs for my son.

Is there a catch somewhere in doing this switch? Assume investments are several years old so no exit load.
This will attract capital gains(same a redeeming the MF). So, plan to do this in chunks over a few years, so that you stay within the 1L exemption limits.
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Old 11th January 2023, 11:12   #4324
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Re: The Mutual Funds Thread

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This will attract capital gains(same a redeeming the MF). So, plan to do this in chunks over a few years, so that you stay within the 1L exemption limits.
Good point. I did not know that CG is applicable even when switching inside the same scheme.
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Old 11th January 2023, 11:24   #4325
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Re: The Mutual Funds Thread

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Good point. I did not know that CG is applicable even when switching inside the same scheme.
Although the name might be the same, it is not same scheme. The regular and direct are treated as two different schemes, with separate ID, NAV, load etc. As clarified by other member, this would be treated as redemption and purchase transaction.
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Old 11th January 2023, 12:15   #4326
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Re: The Mutual Funds Thread

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This will attract capital gains(same a redeeming the MF).
This is one of the worst tax rules now, designed to protect AMCs and agents.

Govt should make all switches within the same category (e.g Equity to equity) as tax-free. Switches between fund houses should also be enabled via platforms like MFU or CAMS. And these switches should also be tax-free.

That's the way to increase competition and protect investor interest. But entrenched players are against this.
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Old 11th January 2023, 12:30   #4327
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Re: The Mutual Funds Thread

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This is one of the worst tax rules now, designed to protect AMCs and agents.

Govt should make all switches within the same category (e.g Equity to equity) as tax-free. Switches between fund houses should also be enabled via platforms like MFU or CAMS. And these switches should also be tax-free.

That's the way to increase competition and protect investor interest. But entrenched players are against this.
The question though is how do you track the capital gains of the previously switched funds. I would keep switching perennially until I liquidate since then I would have to pay capital gains only on the last year or so so of returns..
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Old 11th January 2023, 12:51   #4328
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Re: The Mutual Funds Thread

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The question though is how do you track the capital gains of the previously switched funds. I would keep switching perennially until I liquidate since then I would have to pay capital gains only on the last year or so so of returns..
Not that difficult if one really wants to implement it. Some kind of tax deferral scheme can be implemented, where redemption proceeds are invested back in same scheme and you will get taxed at the end considering cumulative taxability across all such switches done in between.

We all know what kind of pain it was to fill Schedule 112A for grandfathered investments. Compared to that, this should be fairly trivial to implement and track.
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Old 11th January 2023, 13:04   #4329
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Re: The Mutual Funds Thread

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The question though is how do you track the capital gains of the previously switched funds. I would keep switching perennially until I liquidate since then I would have to pay capital gains only on the last year or so so of returns..
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Not that difficult if one really wants to implement it.
Exactly. The onus of paying the right CG taxes is always on the individual. The government can simply put additional tax return requirements whenever there are switches. It is upto the individual to do the cost-benefit analysis for e.g. additional compliance requirements vs switch to a better performing/lower cost fund.
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Old 17th January 2023, 12:07   #4330
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Re: The Mutual Funds Thread

I had put in money on SBI Blue Chip fund many moons ago when direct funds were still a dream. The fund has given sizeable returns and I am no mood to encash it. Is there a way to move this to direct fund? There is no active investment in this fund from end, I have SIPs in other direct funds for that.
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Old 17th January 2023, 12:35   #4331
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Re: The Mutual Funds Thread

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I had put in money on SBI Blue Chip fund many moons ago when direct funds were still a dream. The fund has given sizeable returns and I am no mood to encash it. Is there a way to move this to direct fund? There is no active investment in this fund from end, I have SIPs in other direct funds for that.
Moving from regular to direct fund would entail capital gains taxes, which is probably long term CG in your case. So move the funds in tranches every year so that the LTCG is below the 1 lakh threshold limit.
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Old 17th January 2023, 15:03   #4332
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Re: The Mutual Funds Thread

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Moving from regular to direct fund would entail capital gains taxes, which is probably long term CG in your case. So move the funds in tranches every year so that the LTCG is below the 1 lakh threshold limit.
Am sorry, I should have phrased my question better. I want to move it to direct without having to worry about LTCG. It’s said that moving from commission based to direct within the same fund would mean paying capital gains tax.
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Old 17th January 2023, 15:31   #4333
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Re: The Mutual Funds Thread

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Itís said that moving from commission based to direct within the same fund would mean paying capital gains tax.
But not if your total capital gain is within the Rs. 1L/per annum limit.
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Old 30th January 2023, 15:24   #4334
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Re: The Mutual Funds Thread

I never google searched Adani before this scam and never invested in Adani stocks. Actively managed funds do not invest in Adani companies.

but
Nifty50+Nifty Next 50 index have many Adani companies (invested in both index funds)
Have LIC policy and Superannuation fund is with LIC and they invested in Adani

Last edited by Latheesh : 30th January 2023 at 15:25.
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Old 30th January 2023, 15:47   #4335
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Re: The Mutual Funds Thread

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Actively managed funds do not invest in Adani companies.
You may want to check on this again.

For example, 'Quant Mid cap' which has been one of the better performing actively managed funds in the recent past has such holdings.
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