[techcoze]

Originally Posted by Simhi

I agree with you. The mentioned step is not required. Once a folio is created, we can then deal directly with the fund site. You can also switch existing fund to Direct fund. That's how I converted all my funds to direct ones.

will switching to direct fund result into capital gain calculation and related tax liability?

[Simhi]

Originally Posted by techcoze

will switching to direct fund result into capital gain calculation and related tax liability?

All switches are treated as redemption from fund and then a fresh purchase. So whatever tax implications are applicable for redemption would be applicable for a switch.

[SilentEngine]

Originally Posted by DigitalOne

If the above works and you are able to get the lowered expense benefit for older investments also then good. I wrote the process I followed back in 2013. The AMCs pay a trailing comission to the brokers for existing investments; this is not applicable for Direct investments. It makes sense to change your older regular investments to Direct.

Yes, i have been able to use the same folio for direct investments. Existing units in Regular schemes will continue to remain as Regular (brokers will get the commissions) till the time they are redeemed or switched to direct scheme. Switching will be considered as a separate redemption and purchase transactions.

Whatever the approach, I don't think it's possible to convert 'regular' units to 'direct' units without doing a switch.

[ghodlur]

Originally Posted by inder

Wish to invest lump sum in tax saving MF. Had invested 75k each in Axis long term and Birla SL tax relief 96 last year. Have to identify 2 different MF's for this year. So that I can invest whenever the market cracks or comes near 27-28k.Had invested last year in july and sept, currently the returns are 13% and 9.5%. Any suggestions for this year ?

I would suggest invest in a short term debt fund and start a STP for a large cap equity or diversified equity or multicap equity funds depending upon the tolerance to risk. This way you can get the benefits of idle money earning income plus Systematic investment too.

Experts can confirm if this is a good approach. I have done this and benefited.

[DigitalOne]

Originally Posted by SilentEngine

Yes, i have been able to use the same folio for direct investments. Existing units in Regular schemes will continue to remain as Regular (brokers will get the commissions) till the time they are redeemed or switched to direct scheme. Switching will be considered as a separate redemption and purchase transactions.

Whatever the approach, I don't think it's possible to convert 'regular' units to 'direct' units without doing a switch.

You are right. I went through my old statements, and realised that the AMCs indeed have executed a switch for my investments from Regular to Direct.

[ashwinsid]

A very n00b (newbie) question, and one which has held me back from getting my feet wet with MFs, stocks etc.

My wife wants to set aside 2000-4000Rs per month for Mutual Fund investments. Ideally a minimum of 5 years, upto 10 years timeframe. Preferably, ATLEAST get back the full amount invested if not any returns i.e minimum should not loose money if not any gains.

She has an account at Scripbox and I have an account at zerodha.

Request to please advise ideal MFs to invest in given the 5 year-10 year timeframe, low to medium risk. Goal is to have adequate funds for school admissions etc for our newborn kid. Thank you!

[Simhi]

Originally Posted by ashwinsid

Preferably, ATLEAST get back the full amount invested if not any returns i.e minimum should not loose money if not any gains.

Every mutual fund whether debt fund (including liquid funds) or equity fund carry risk and do not guarantee that your principal will be safe. I don't want to scare you but that's the truth. There are various categories of debt funds with low risk to moderate risk.

If you want principal safe and have a duration of 5 years, go with recurring deposit of banks. If you are ready to take moderate risk, then with a horizon of 5 years you can think of MIP / Balanced fund/ Equity fund.

[sgiitk]

@Simhi; is spot on. There is always a risk element in any MF investment. But then you cannot beat inflation without this risk howsoever minimal it may be. Over the past 15+ years I have done quite well. Now I am risking a PMS scheme as well.

[earthian]

Originally Posted by sgiitk

Now I am risking a PMS scheme as well.

I have learnt the hard way that PMS is not for me. Had invested a bunch in a PMS, and after 26 months, have just about managed to retain capital deployed. That is if the operator liquidates the holding without any further erosion and returns the money. Experience with a foreign bank was also poor with returns lower than benchmark.
Shall hence forth go on my own.

[govigov]

Originally Posted by ashwinsid

Request to please advise ideal MFs to invest in given the 5 year-10 year timeframe, low to medium risk. Goal is to have adequate funds for school admissions etc for our newborn kid. Thank you!

There are risks involved in mutual funds. But take a look at how they have been doing so far, even though past profits do not guarantee future gains. Assuming you already have section 80C covered, go for large cap bluechip funds, like the one from SBI.

[vikasshu]

Originally Posted by SilentEngine

Is this step required? Once a folio is created, it can be activated in the Fund's website and then you can invest in direct funds without affecting existing funds.
I have done this for few AMCs and I was able to use same folio to have both regular and direct fund units.

Originally Posted by DigitalOne

If the above works and you are able to get the lowered expense benefit for older investments also then good. I wrote the process I followed back in 2013. The AMCs pay a trailing comission to the brokers for existing investments; this is not applicable for Direct investments. It makes sense to change your older regular investments to Direct.

Originally Posted by Simhi

I agree with you. The mentioned step is not required. Once a folio is created, we can then deal directly with the fund site. You can also switch existing fund to Direct fund. That's how I converted all my funds to direct ones.

Thank you so much friends for pitching in with your suggestions specially digitalone & srvm.

I am a bit confused about one point and therefore thought of taking advice once again.

The way I understand regular MF plan is that you pay the cost at the time of purchase of units. Later on when some one subscribes to direct plan of the same MF, it does not impacts older units because you've already paid the charges. Or it does gets impacted and therefore there is a need to follow digitalone's suggestion of writing a letter. Please help.

Thanks & Regards...Vikas

[saket77]

Originally Posted by vikasshu

The way I understand regular MF plan is that you pay the cost at the time of purchase of units. Later on when some one subscribes to direct plan of the same MF, it does not impacts older units because you've already paid the charges. Or it does gets impacted and therefore there is a need to follow digitalone's suggestion of writing a letter. Please help.

Thanks & Regards...Vikas

The AMC will continue to pay commission on investments/ units under regular plan (called trail commission) even if you invest in direct plan of the same scheme in the same folio. Of course, no commission payable on units under direct plan.
The trail commission is payable to distributors until the investment is not redeemed. This charge is uaually between 1-1.5 percent per annum.

Regards.

[sairamboko]

Hi all! I am planning for tax saving for this year. I am evaluating my options. Right now I am investing ₹73k annually in PPF. Is it advisable to reduce half of it and invest in ELSS MF? Planning for a SIP. One question though . All the ELSS MFs have a 3 years lock in period. So as I do my SIP, the lock in period for different units will change right ?

[saket77]

Originally Posted by sairamboko

Hi all! I am planning for tax saving for this year. I am evaluating my options. Right now I am investing ₹73k annually in PPF. Is it advisable to reduce half of it and invest in ELSS MF? Planning for a SIP. One question though . All the ELSS MFs have a 3 years lock in period. So as I do my SIP, the lock in period for different units will change right ?

ELSS, in my opinion, is one of the best tax saving plus investment options out there. Yes, lockin is only 3 years, but do not invest because of this trait. You should be prepared to keep invested in case market is bearish during the time of redemption after 3 years. Also, keeping invested for longer in equities rewards you handsomely. Plan for at least 5-7 years. Great if for longer.

For the other part of your query regarding lockin of units, then yes; they are available for redemption on a FIFO basis.

Regards.

[sairamboko]

Originally Posted by saket77

ELSS, in my opinion, is one of the best tax saving plus investment options out there. Yes, lockin is only 3 years, but do not invest because of this trait. You should be prepared to keep invested in case market is bearish during the time of redemption after 3 years. Also, keeping invested for longer in equities rewards you handsomely. Plan for at least 5-7 years. Great if for longer.



For the other part of your query regarding lockin of units, then yes; they are available for redemption on a FIFO basis.



Regards.

Thanks Saket! I feel the lock in period is useful for me because I spend it if new can close it anytime. I will now invest in ELSS instead of PPF. One more question, for income tax what proofs do we have to submit?