My PPF will mature next year with about 20 lacs accumulated. If I transfer the entire matured amount to an ELSS fund, will the tax-free benefit on the entire amount continue?
1 Answers
Hi,
Kindly note that these are two different transactions.
The PPF withdrawal amount is tax-exempt as it falls under Exempt-Exempt-Exempt category.
Kindly read :
https://www.relakhs.com/tax-treatment-taxation-rules-investments-eee-eet/
If you re-invest this corpus in ELSS (tax saving mutual fund) then any gains made on redemptions after 3 year lock-in period is also tax-free. The long term capital gains on equity mutual funds are tax free after minimum holding period of 12 months.
But do understand the risks associated with equity funds and take informed decision.
Kindly read :
https://www.relakhs.com/mutual-funds-taxation-rules-capital-gains-tax-rates-on-mfs-fy-201516/
https://www.relakhs.com/best-elss-funds-2017-2018/
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