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How to read Mutual Fund Account Statement!

Yesterday one of my client called me and was looking for mutual fund account statement and also want to know how the fund performed till today.

I sent all the details by email that is account statement of all investment made in mutual fund under my ARN code, and after receiving she called me back as unable to understand as how to check the details.

I guess this problem is faced by many people who invest in mutual funds as what to check in that statement, they find difficult to check all the details especially how much invested till today, how much dividend received or reinvested till today, and what is current value of your investment, how much return you got from your investment.

In order to make you understand and what to read in mutual fund account statement i will classify that in different sections to get easy access to your mutual fund account statement.

1. Check your Personal details
  Personal details like your complete name, address, email address, Pan details are correctly added in account statement, as if the information is not added especially email address, phone number or address then you may miss important alerts regarding your transaction in that mutual fund scheme.

You must give the correct Permanent Account Number (PAN), Check your PAN details mentioned in the account statement and ensure there are no discrepancies.
Now Pan and KYC is compulsory in mutual fund investment.

Very recently i had planned to create online access to one of my investment as decided to sell my some of old holding in mutual fund investment online, creating online access is available in many mutual fund website, but i was unable to do so reason my pan details were not added in that folio, so its very important to add or update your details in mutual fund account statement.

2. Investment Details
Second most important details to check is how much amount you have invested, what is current value of your investment, which option you opted dividend or growth.
If it is dividend option check whether its dividend payout or dividend reinvestment
If it is dividend payout check whether you have received all the dividends.
Normally all details are available in portfolio summary and that give you clear picture of your investment in that particular scheme.

In order to check complete details ask for "Consolidated Account Statement"
i.e from inception

3.  Redemption and Dividend Mode of Payment Option
 This is one of the most important thing to check in your mutual fund account statement. Now ECS /auto credit option is available in most nationalized banks in India, so if your mode of payment is by cheque, update that to ECS or direct credit in your bank account. 
Also check  that your bank complete details are correctly added in that mutual fund scheme.

 4. Bank Details
 Make sure your bank's name and your account number are accurately mentioned to avoid problems while redeeming units or getting dividend from that scheme. If you want to change your bank mandate, follow change of bank details process and update your bank details in that mutual fund scheme.

5.Nominee Details
This is also one of the most important details to check in your mutual fund account statement. Nominee details are available in account statement, normally information is placed on right/left side of account statement.
If nominee details are not available in mutual fund account statement, call mutual fund customer care helpline number, and verify  and update your nomination details.  

Where to check details in Mutual Account Statement

Refer this:

Toll Free Helpline Numbers of Mutual Funds in India

2. Some mutual fund websites have such option available in website, like in SBI mutual fund website, you can check whether nominee details are registered in your folio or not.

3. If you have online access to your mutual fund investment, you can check the nominee details by visiting online.

Which Mutual Fund Schemes are eligible for tax deduction under section 80C?

Mutual Funds Schemes which give tax deduction under section 80C are:

1. ELSS Fund (Equity Linked Savings Schemes)
2. Mutual Fund Pension Plans
Equity Linked Savings Scheme  
ELSS fund (Equity Linked Savings Scheme), i.e., a mutual fund scheme, where tax deduction of up to 1 lakh (per financial year) from total income is available under Section 80C of the Income Tax Act, 1961

The ELSS Scheme is locked in for 3 years. Lock-in for three years prevents unnecessary withdrawals and allows your money to grow over a period of time.

Also refer
Tax Treatment for Equity Linked Savings Scheme (ELSS)
Tax Saving Scheme Performance

2. Mutual Fund Pension Plans

The pension funds offered by mutual fund houses rarely get a mention for deduction under section 80c of income tax act.

Mutual Fund Pension Plans funds are debt-oriented tax savings funds and most neglected investment option – due to lack of awareness.

 Mutual Fund Pension Plan schemes get tax benefit (up to Rs1 lakh) as a Notified Pension Fund U/S 80C of the Income Tax Act, 1961, subject to the fund being notified by the central government under Section 80C(2)(xiiic) of the Income Tax Act, 1961. 

 Investment in Mutual fund Pension Plans is locked in for 3 years and exit load will also be charged if one exit before the age of 58 years (subject to lock in period of 3 years).

The available mutual fund pension fund are

1. Templeton India Pension Plan
2. UTI-Retirement Benefit Pension Fund


Rajiv Gandhi Equity Savings Scheme (RGESS)

Rajiv Gandhi Equity Savings Scheme (RGESS) is a new equity tax advantage savings scheme for equity investors in India. 

The scheme got it's approval on September 21, 2012. It is exclusively for the first time retail investors in securities market.

Who Can Apply For RGESS

Answer these questions?

1. Whether your gross total annual income below Rs 10 lakh? YES/NO
2.  Do you have a demat account? YES/NO
3. Have you made any transactions in equity or derivatives before November 23, 2012?  YES/NO

 1. First criteria that is your annual gross income should be below 10 lakhs to apply for this scheme.

2. The second criteria is whether you made any transaction in equity or derivatives before Nov 23, 2012, if answer is yes, then you are not eligible for this scheme.

3. Now the third criteria having demat account is important, if you don't have demat, still you can go ahead with this scheme by opening demat account with either NDSL or CDSL through a depository participant. A depository participant is either a broker or a bank and you can get a list of depository participants from NSE, NDSL and CDSL site

4. If you have demat, but not operated before for any transaction  then you should designate that account as a RGESS account. You can use the Form A for this purpose.

Where to invest to get tax benefit under RGESS
1. Equity shares falling in the list of securities declared as "BSE-100" or " CNX-100".

2. Equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government

3. Units of Exchange Traded Funds (ETFs) or Mutual Fund (MF) schemes which have securities eligible under Rajiv Gandhi Equity Savings Scheme (RGESS) as underlying, provided they are listed and traded on a stock exchange and settled through a depository mechanism.

4.Follow on Public Offer of eligible securities.

5. New Fund Offers (NFOs) of eligible ETF's and mutual funds.

6. Initial Public Offer of a public sector undertaking wherein the government shareholding is at least fifty-one per cent. which is scheduled for getting listed in the relevant previous year and whose annual turnover is not less than four thousand crore rupees during each of the preceding three years;


3. How much you can invest in RGESS
The maximum Investment permissible under the Scheme is Rs. 50,000 and the investor would get a 50% deduction of the amount invested from the taxable income for that year. The benefit is in addition to deduction available u/s Sec 80C.
The deduction is available under section 80CCG.
Is this tax deduction of maximum of Rs.50,000 over and above limit of Rs.1,00,000 that is currently available for me under section 80C of income tax act ? 

Yes. You can avail Rs.1,00,000 under Section 80C of Income Tax Act and Rs.25,000 for maximum investment of Rs.50,000 under 80CCG.

What is section 80CCG 
A new section 80CCG under the Income Tax Act, 1961 on ‘Deduction in respect of investment under an equity savings scheme’ is introduced to give tax benefits to ‘New Retail Investors’ who invest up to Rs.50,000 in ‘Eligible Securities’ and whose gross total annual income is less than or equal to Rs.10 Lakhs. 

How much tax benefit you will get if you invest Rs.50,000  in RGESS?

Tax Savings of Rs 2575 for investors under 10% slab
Tax Savings of Rs. 5150 for investors under 20% slab 

Whether having lock in period in RGESS?
The scheme is locked in for 3 years. Fixed lock-in during first year followed by a flexible lock-in for subsequent two years.

Once the investments are made in the eligible securities, they must be locked-in for a period of three years from the date of investment. In case you intend to dispose of the holdings earlier than three years, it can be done after completion of at least one year from the date of investment subject to certain conditions. Thus, the holding period under RGESS is for three years, which includes ‘Fixed Lock-in’ for one year and Flexible lock-in for two years.

An investor is not permitted to sell, pledge or hypothecate any eligible investment during the fixed lock-in period.

  Forms for RGESS
1. Form A
2. Form B
3. Form C


Dividends in Equity Mutual Funds in India {Jan-Feb 2013}


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