Brokerage Fees on Mutual Funds

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Mohit (Querist)
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15 January 2010 As per SEBI new circular, commission or Fees on mutual funds cannot be deducted from the amount paid for purchase of MF. Thus, the banks are debiting the accounts for such commission or Fees.

My question is whether the above fees or commission should be shown under the Bank Charges or should be added to the cost of investment.

Sambu Suresh

Sambu Suresh (Expert)
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15 January 2010 The commission or fees what ever the expenses incurred are in connection with the purchase of Mutual funds.Suppose if the commission paid is not added to the cost of the mutual funds then they would be shown at the lesser value than the cost paid for it. Therefore it should be added to the cost of the mutual funds.

Randeep Singh

Randeep Singh (Expert)
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17 January 2010 Any expense while acquiring asset/investment forms part of cost of that asset, so initial commission/ fees paid also form part of cost.

Cheers!

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