Lifting The Veil Off Mutual Fund Taxation

Experts advise investors to be aware of certain rules before delving into mutual funds

- Ashfaque Ismail

Mutual funds (MFs) are often the most preferred choices of investment for wealth creation. However, before opting for it, there remains a series of hesitations, such as do MFs guarantee returns? Can past performance guarantee future performance of a fund? Are returns on investment more important than its Net Asset Value (NAV)? How are profits earned from MFs taxed? Hence, experts widely advise investors to be aware of certain rules before investing.

General apprehensions potential MF investors have are - they are risky investments or deep pocket investments or generally not much money is made in equity or meaningful sum of money is required to start investing. “Through the Integrated Action Plan (IAP) initiative, we continuously try to address these apprehensions,” says Manish Mehta, Head, Sales and Marketing, Kotak Mahindra Asset Management Company. According to him, an investor can mitigate the risks by investing in small doses regularly to iron out volatility. Anyone can invest in an MF with an amount as low as ₹500. Over a long period of time, investing in equity mutual funds have generated good returns.