Investing Can be Interesting & Financial Awareness: March 2013

You can update your PAN in all mutual fund schemes with one request.

Cams gives us a facility to update our pan details in all our investment in mutual funds by filling one form that is Service Request update based on single Pan number.

Why to Exercise this option
Earlier if you have made investment in mutual funds that means before July 2007, that time Pan number details were not compulsory as we use to make investment without adding Permanent Account details if investment amount was less than Rs. 50,000/-

Updates related to Pan and KYC in mutual funds

In December 2004, those investors who invested Rs.50,000 or more had to compulsorily give PAN

In July 2007, PAN become compulsory for all, irrespective of the amount you have invested, so if your investment is done before 2007, then pan details were not updated in that folio.

From 1 January 2008, investors who invested Rs.50,000 or more had to submit their KYC.

From 1 January 2011, KYC become mandatory for all investors.

If your PAN get updated then you get your complete mutual fund investment details in your CAS (Consolidated Account Statement) which is based on Pan of unit holders.

Form:

1. Cams Pan Update Form
2. Karvy Pan Update Form

Dividend in Reliance Growth and Reliance Vision Fund - Record date March 26, 2013

Dividend in Reliance Growth and Reliance Vision Fund - Record date March 26, 2013

PPF Interest Rate Update For 2013-14

The interest rate of Public Provident Fund (PPF) has been lowered from 8.8% to 8.7% with effect from April 1, 2013, said a finance ministry statement.

Now we will earn less on post office savings schemes as government decided to reduced them marginally by 0.10%.

The revised interest rates will be affective from 2013-14.

Source:http://www.simpletaxindia.net/2013/03/interest-rate-ppf-nsc-scss-mis-potd.html

Dividend in SBI Magnum Tax Gain Scheme (Record date March 28, 2013)

SBI Mutual Fund has announced a dividend of 35% (i.e. Rs 3.5 per unit on the face value of Rs 10) in SBI Magnum Tax gain Scheme. The record date for dividend is March 28, 2013. NAV as on 21th March,2013 Rs. 34.2585

*Pursuant to payment of dividend, the NAV of dividend option of Scheme /Plans would fall to the extent of payout & statutory levy, if applicable.

When will you receive dividend

After record date, if you opted for direct credit then in such case will get credited within 7-8 working days in your bank account registered in that scheme, and in case of cheque payment it will take 10-15 working days.

This information (details) are available in account statement as which mode of payment is alloted to you.

Switch between different Plans of Mutual Fund Scheme

As you all know mutual fund allows investor to switch money from one mutual fund scheme to another from the same fund house, using transaction slip.

What is Switch

Switch is process of transferring mutual fund units from one scheme to another, but currently this option is allowed schemes of same fund house.

Types of switch

1. When units are switched from same mutual fund scheme but from Dividend plan to growth plan or vice-versa

2. When units are switched from one mutual fund scheme to another mutual fund scheme, (equity or debt )

Dividend and Growth plan switch considered as redemption and new purchase, Whether as switch from Dividend Reinvestment to Dividend payout or vice-versa is considered as "Change in Mutual Fund Scheme".

Investors can opt to switch units between Dividend Plan and Growth Plan at NAV based prices. Investors can also switch into/from other select open-ended schemes.

However, investors need to be careful of entry and exit loads while switching between Debt and Equity Schemes.

Whether it will attract any load

A switch from one scheme to the other is treated as redemption from the scheme from where it is switched out & a purchase into the scheme into which it is being switched. Thus you will be liable for any 'applicable' entry load or exit load.

How to go ahead with this switch process:

To switch, all you need to do is fill up a transaction slip, which can be downloaded from mutual fund website or detached from the bottom of your account statement. The same can be submitted at any of mutual fund official points of acceptance of transactions.

You can submit request switch request online if having online access to your investment.

Tax implication on Switch

A switch from one scheme to the other is treated as redemption from the scheme from where it is switched out & a purchase into the scheme into which it is being switched.

If Equity Mutual Fund Scheme and units are held for less than a year then will be added to your taxable income.

If Equity Mutual Fund Scheme and units are held for more than a year then tax will be NIL

If other than equity mutual fund scheme and units are held for less than a year then tax will be added to your taxable income

If other than equity mutual fund scheme and units are held for more than 12 months then 10.30% without indexation or 20.60% with indexation (10%/20%+ 3% education cess)

Applicable tax rate on mutual funds in India