CA Umesh Sharma
Quick Summary
Arjun (Fictional Character): Krishna, nowadays more and more people are making investments in mutual funds through SIPs? Krishna(Fictional Character): Arjuna, SIPs i.e., Systematic investment plans are a convenient method of investing in mutual funds in which the investor can invest small amounts
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FAQ :
Yes, you can claim a deduction up to Rs. 1,50,000 under Section 80C for investments made in ELSS (Equity Linked Savings Scheme) mutual fund SIPs, provided you haven't already used the full deduction limit with other eligible investments.
For equity fund SIPs, short-term capital gains (held for less than 12 months) are taxed at 15%. Long-term capital gains (held for 12 months or more) are taxed at 10% on gains exceeding Rs. 1,00,000.
If a debt fund SIP is held for less than 36 months, short-term capital gains are taxed at your applicable income tax slab rate. For holdings of 36 months or more, long-term capital gains are taxed at 20% after indexation.
Hybrid funds are taxed based on their equity exposure. If the equity exposure exceeds 65%, they are taxed like equity funds; otherwise, the tax rates applicable to debt funds apply.
SIPs help in developing financial discipline by allowing periodic investments of smaller amounts, rather than a lump sum. Longer SIP durations are generally more tax-efficient.
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