Mutual Funds are an incredibly popular investment avenue, especially in India, crediting to the benefits like expert management and attractive returns over time. Although these funds don’t have many hidden charges, they get taxed. This can significantly change how much money one sees at withdrawal.
In this blog, we focus on decoding taxes on Mutual Fund gains and a peek into minimising them. Let’s have a look!
A Mutual Fund is an asset where multiple investors pool their money together, and the fund manager invests this money into different securities such as Stocks and Bonds.
When buying a Mutual Fund, the only factors affecting the taxation are when one decides to sell it (Time) and how profitable it was (Profits).
However, it is essential to note the following:
Now, let’s explore some direct tax saving options:
Investing in mutual funds helps you set your long term goals, but it can also provide income tax benefits with the help of Section 80C. An individual can claim deductions based on some investments or expenses, up to Rs 1,50,000.
With the help of all these provisions, you can claim deductions hence reducing your tax liability. We will go into more detail about each of these investment options in separate blog posts.
Other avenues can help you here.
You might be calculating how much taxes you can save now, but wait! This is not all.
That was a lot of sections. We hope you were taking note of all the money you can save in your income tax return this year. What next? Start saving money and taxes from now on, and we will start working on the second part of this blog to bring you more hacks to save taxes. See you in the next one.
Taxpayers are essential to the functioning of any country. Citizens' taxes are used for various activities that benefit both the nation and the citizens. As a result, taxpayers are essentially contributing to India's growth.
Yes, in addition to the deductions claimed with section 80C, with the help of other sections of the Income Tax act such as 80EE(Education Loan) and80D (Medical Expenditure), the total savings can be around Rs 2,00,000.
There are mainly six types of taxpayers in India: Individuals, Hindu Undivided Family(HUF), Association of Persons(AOP), Body of Individuals (BOI), Firms and Companies. Each of these taxpayers needs to file Income Tax returns and pay taxes according to their tax slabs and other incomes.
While filing your income tax, you must enter your deductions for every section; for example, section 80C will include ELSS, Life Insurance premium, etc. Section 80D will have to include all your medical expenditures.
Filing an income tax return is optional if you have no tax liability due to your earnings and do not fall into any tax brackets. However, it is still recommended that you file your ITR to keep a record for future reference.