Top 10 Tax Saving Mutual Funds in India
| Funds | 1-Year Returns (%) | 3-Year Returns |
|---|---|---|
| Aditya Birla Sun Life Tax Relief 96 Fund Growth | 19.3 | 12.1 |
| Aditya Birla Sun Life Tax Plan Growth | 18.9 | 11.6 |
| DSP BlackRock Tax Saver Fund Growth | 9 | 11.4 |
| Axis Long Term Equity Fund Growth | 18.1 | 9.3 |
When can I withdraw my mutual fund without penalty?
Under the federal tax code, you make an early withdrawal if you sell your shares and access funds before age 59 1/2. In these instances, you typically pay a 10 percent penalty. The penalty rises to 25 percent if you cash in shares in a SIMPLE IRA plan that you have held for less than two years.
Can I withdraw money anytime from mutual funds?
An investment in an open end scheme can be redeemed at any time. Unless it is an investment in an Equity Linked Savings Scheme (ELSS), wherein there is a lock-in of 3 years from date of investment, there are no restrictions on investment redemption.
Is it good to have a tax exempt mutual fund?
Tax-exempt funds can be a smart way to reduce your income taxes, but they’re not for everyone. Who doesn’t want a lighter tax bill? Although tax-exempt mutual funds usually produce lower yields, you generally don’t have to pay federal taxes on earnings from tax-exempt money market and bond funds.
Is there such a thing as a tax free income fund?
Let’s break the definition down into two parts; tax-free and income. An income fund is a mutual fund or exchange-traded fund (ETF) which pays dividends to shareholders. Investors use this type of investment to create an income stream from their investments. A tax-free fund is an investment with dividends that aren’t taxed.
How are dividends received from mutual funds taxed?
Dividends received from funds are exempted from tax. While the fund house pays Dividend Distribution Tax (DDT) of 28.84% for mutual funds. Before understanding the taxation structure on capital gains, we need to understand capital gains from the point of mutual fund holding period.
Which is tax free on sale of mutual fund?
Let’s start with equity funds. Once the capital gains are calculated on sale of mutual fund the liability can be calculated. For STCG 15% tax rate is applied, while for LTCG 10% tax rate is applied for LTCG exceeding Rs 1 lakh. Hence LTCG on equity fund up to Rs 1 lakh is tax-free.
