I want to know about applicable NAV for Redemption Transaction Process in mutual fund.
If redemption application is submitted before 3 PM, NAV of the same business day will be applicable and, If redemption application is submitted after 3 PM, the NAV of the next business day will be applicable. This is applicable for all type of schemes. As per SEBI guidelines, redemption proceeds should be dispatched to the unit holder within 10 business days from the specified redemption date.
What is the redemption payment timeline for Liquid Funds / Debt Funds / Equity Income Funds?
Redemption payment timeline for Liquid Funds / Debt Funds / Equity Income Funds are Next business day (T +1) from the day of transaction date.
What is the redemption payment timeline for Equity Fund?
Redemption payment timeline for Liquid Fund is within 3 Next business day (T +3) from the day of transaction date.
What bank details an investor should provide to the mutual fund for smooth electronic transfer of dividend payment?
Investors should provide their complete bank account details for seamless payment through electronics mode such as Bank Account Number, Bank Branch address, IFSC, MICR, type of Account.
What is the procedure to consolidate more than one folio?
Consolidation of more than one folio can be done by submitting a written request and providing detail of every folio. Consolidation of folio is subjected to matching of vital details of every folio such as address, Holding pattern, Mode of holding, Tax status and nominee details.
What is the concept of diversification in Mutual Fund investment and how it is important?
Due to market volatility and the risks that come with mutual fund investments, putting all your eggs in a single basket is not a wise decision. In order to reduce risk and exposure to any one type of asset, they create a portfolio that includes multiple investments among various industries, financial instruments and sectors. So, diversification is very important to avail long term financial goals while minimizing risks.
What are the tax provisions for Debt Funds?
For debt funds currently, dividends are tax-free in the hands of the investor. However, there is Dividend Distribution Tax (DDT) payable by the mutual fund on dividends distributed. Investments for over 36 months qualify for long-term capital gains. For investors there is no TDS on redemption of the units in case they are “resident” under the Indian Income Tax Act, 1961.
What is the tax treatment on STP?
STP will be treated as sale for the purpose of taxation and you may have to pay applicable tax as per prevailing tax rules.