There are different investment options that come with taxable and non-taxable parameters.
FD/ Stock/ MF are taxable, but taxation is less for MF equity investment. Also, Long term capital gain tax is only 10% over and above a rebate of 1 lac. Additionally, you have to pay the taxes only at the time of redeeming the units.
Hence, if you invest in MF for 10 years and redeem the money in the 10th year, the tax is only applicable then.
It is usual for MF to yield an average return of 12% in 10 years, which means that even with 10% taxation, the post-tax return is close to 10.8%. However, this is not fixed.
All in all, returns of all instrument post taxes MF still stands out.
For more information on investment assets, you can rely on Future Value, a pool of financial experts that can guide you through this and help you in your investment journey.
What are SWP and its benefits?
For investment in Mutual funds, many MF firms offer an investing strategy called a Systematic Withdrawal Plan (SWP). Investing in this way allows investors to grow their investments while receiving monthly payments.
Benefits of SWP:
There are numerous advantages:
- Offers investors a consistent source of income
- Investments may qualify for tax savings since taxes are only paid on withdrawals, not the whole investment.
- Investors are encouraged to maintain discipline by having to make regular withdrawals from their investments.
For more information on investment assets, you can rely on Future Value, a pool of financial experts that can guide you through this and help you in your investment journey.
