Taxation on Mutual Fund Returns: The Indian stock market is gradually recovering from the weakness of the past few months and is now gradually gaining strength. Although India’s performance this year has been somewhat slower than global markets, market experts expect the domestic market to see a significant rebound in the coming days. This volatility has directly impacted mutual fund investors’ portfolios, yet long-term investors are not overly concerned, as they expect stable returns over time.
Increasing Participation of Women
The number of mutual fund investors has reached record levels in the past few years. Significantly, the participation of small investors and working women has increased. Many men are now investing in their wives’ names through SIPs. This not only strengthens the family’s financial security but also provides the opportunity to build multiple investment portfolios.
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Tax Rules for SIPs in Wife’s Name
Investing in mutual funds in the wife’s name also applies to the same tax rules as any other investor. Capital gains tax is payable on the returns from SIPs. Short-term capital gains tax is levied on selling units in equity funds within one year, and long-term capital gains tax is levied on selling units after one year. Tax on debt funds is generally determined according to the investor’s tax slab. The tax rate or taxation structure for investing in the wife’s name does not differ.
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Make Financial Planning with Taxation in Mind
Many investors assume that investing in the wife’s name offers some kind of tax relief, but this is not the case. The rules remain the same, and the tax on capital gains is the same as for any other investor. Therefore, a clear understanding of tax rules before starting an investment is essential for sound financial planning.