Financial Transactions with Mutual Funds (Purchase, Redemption and Switches)
Financial Transactions with Mutual Funds:
- Generally involve three main types: Purchase, Redemption, and Switches.
-
Purchase: Buying units of a mutual fund scheme.
-
Types of Purchase Plans:
- Lumpsum Investment: Investing a one-time large sum.
- SIP (Systematic Investment Plan): Investing a fixed amount at regular intervals (e.g., monthly).
-
Types of Purchase Plans:
-
Redemption: Selling or withdrawing units from a mutual fund scheme.
- Exit Load: May be applicable if redeemed before a certain period.
- Taxation: Redemption proceeds are subject to capital gains tax.
- Switches: Transferring units from one mutual fund scheme to another within the same fund house.
No Comments