Disclaimer: Past performance may or may not be sustained in future. Exit load has not been taken into calculation. The above calculator ...is just for illustration purpose and one should consult his/her financial advisor before making any investment. SWP option for monthly and quarterly are shown but weekly, half yearly and annually options are also available. If dates selected falls on holiday, then calculation is done based on the next working day.
Investments made in mutual fund schemes carry high risk and there is no assurance or guarantee that the objective of the schemes will be achieved. The above illustration / calculation should not be considered as any guarantee of returns to the investors / who are opting for SWP. In view of the individual circumstances and risk profile, each investor is advised to consult their investment/tax advisor(s) before making a decision to invest. In the above calculations, it has been assumed that investor falls under highest tax bracket (i.e. 30%) and total income of the investor does not exceed Rs. 1 crore. Gains on the redemption of units of mutual fund are treated as capital gains for income tax purpose. For equity-oriented schemes, gains on the investment for <=1 year are treated as Short-Term Capital Gains (STCG) and taxed at 15% and 30% in case of debt oriented schemes. Gains on investment greater than 1 year are treated as Long-Term Capital Gains (LTCG) for equity oriented s chemes and are exempt as per current tax regulations and greater 3 years in case of Debt Oriented schemes is taxed at 20% plus additional taxes post indexation. Calculations of tax include the amount of tax plus surcharge. At the time of the redemption of units, redemption amount comprises two parts. One is the invested amount and the other is gains on the invested amount. STCG/LTCG tax is applicable only on the gains made on the redemption units. In case of Systematic Withdrawal Plan (SWP), at the time of redemption of each instalment, investor needs to pay STCG/LTCG tax only on the gains part and not on the invested amount. Over a period of time with market appreciation, in each SWP instalment, invested amount (principal) component decreases and growth/gains part increases. Thus it helps the investor over a period of time to consume less principal amount and thereby allowing the balance principal amount to grow further. Mutual Fund investments are subject to market risks, read all scheme relate d documents carefully.
Please note that in the Union Budget 2018, it has been proposed to introduce Long Term Capital Gains (LTCG) on equity oriented mutual fund schemes. LTCG from sale of equity shares and equity mutual fund schemes are proposed to be taxed at 10%, if an individual�s total capital gains cross Rs1 lakh. Currently, there is no LTCG tax if one holds the equity mutual fund units for more than a year. The Union Budget 2018 has proposed that all gains up to January 31, 2018 will be grandfathered. Only the Gains that would arise after January 31, 2018 would be considered. Education Cess is also proposed to change to 4%. Also, Exemption interest income on fixed deposits with banks has been proposed to be increased from Rs10,000/- to Rs50,000/- for Senior Citizens and TDS shall not be required to be deducted on such income, under section 194A. These changes have not been taken into consideration in the above illustration. The proposed changes could lead to increase in tax liabili ty of investor for withdrawal made through SWP. Investors are requested to consult their tax / financial advisor before taking decision of investment / opting for Bandhan SWP facility.
This content is for information purposes only and is not an offer to sell or a solicitation to buy any mutual fund units/securities. These views alone are not sufficient and should not be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions and estimates included here constitute our view as of this date and are subject to change without notice. Neither SBI Mutual Fund / SBI Funds Management Private Limited / SBI Mutual Fund Trustee Company Private Limited, nor any person connected with it, accepts any liability arising from the use of this information. The recipient of this material should rely on their investigations and unlike the traditional investment avenues like PPF, NSC, Bank Fixed Deposit, investment in mutual funds is subject to market risks. Hence, the performance of these asset classes is not strictly comparable. In view of the individual circumstances and risk profile, each investor is advised to consult their investment/tax adviser(s) before any investment decision.