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| | The Pune Entrepreneurs Network Network is not currently active and cannot accept new posts | | save tax | Views: 391 | | Aug 10, 2007 6:16 am | | save tax | # |
Rajkumar lodha | |
Dear all,
One can save tax by investing into mutual funds, when you lie in to higher tax brackets.
If you invest in FDs one has to pay 33.33% tax. But if the same amount is invested in the Mutual Fund one pay only 12.24% on the dividend declared. Thus you save on the tax.
Also if you hold the fund 91 days after the dividend is declared, you can reduce your taxable income by booking nominal loss. This happens as follows.
1. When dividend is declared NAV drops.
2. Decrease in NAV is considered as capital loss if hold for 90 days.
3. This loss is nominal loss as the drop in NAV comes back to us as the Dividend.
3. If this loss can set of against the capital gain in the same financial year. Thus reducing your taxable income.
4. Thus is the end we can book loss though there is no loss & thus reducing the taxable income. Also we save on tax as tax on dividend is less than FDs.
5.Also returns on MF are higher than Fds.
Private Reply to Rajkumar lodha | | Sep 06, 2007 3:49 pm | | re: save tax | # | 
Shrinath Navghane | | Hi Raj...
very interesting post here. Let me know what if we have a client with a FD and wants to invest the returns into MF? I think there is a possibility to SAVE more of our precious money here.
Regards,
Shrinath Navghane
Founder
Pune Entrepreneurs Network
Visit my complete Business Profile + Testimonials + Network on LinkedIN:
http://www.linkedin.com/in/shrinathPrivate Reply to Shrinath Navghane | | Sep 10, 2007 1:45 pm | | re: re: save tax | # |
Rajkumar lodha | |
Hi
Returns on the MF are market dependant i.e. dependant on the sensex. But if one can keep hold on the investment for more than one year, he can get returns more than 25% per annum.
For better returns one can go for the sectoral funds. like Tata Infrastructure fund.
Also for tax saving one can invest in to SBI magnum fund93. Which has given consistant return of more than 20% per annum from inspesion.
Thanks.
Rajkumar. Private Reply to Rajkumar lodha | | |
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