Hello Sir,
I may have asked this question on my previous post which you may ignore. If I have 2 lacs and I want to prioritize leading MIP(s) over traditional FD(s) then would this be a good decision? An investment of 2 lacs in a FD @ 8.5% interest would get me approx 3lacs at the end 5 years with no tax. However if purchase a debt fund MIP (say Birla SL Wealth 25 ll) it shows 10.1% for 5 years but would this not take out more tax even if I take growth plan and not dividend one? Please help! Thank you.
1 Answers
Hi,
Is n't the 'interest income' from Fixed Deposits taxable? May I know what do you mean by 'no tax' regarding FDs? In case of FDs, the interest income is taxable on yearly basis even if you do not close the deposit account.
In case of mutual funds, the applicable taxes (if any) come into picture only at the time of redemption. The rate of tax on MIPs (classified as debt fund for taxation purposes) depends on whether the gains are short-term capital gains or long term capital gains.
But one needs to understand that returns from MIP funds are not guaranteed and the returns on FDs are guaranteed.
Kindly read:
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