A Tax In Time Saves You Dime
Mutual Fund Insight|June 2023
Taxes aren’t always bad for your investments. Here’s when you shouldn’t avoid them
ASHUTOSH GUPTA
A Tax In Time Saves You Dime

Tax is arguably the most dreaded word in the world of savings and investments.

Actually, inflation is the more damaging one, but most investors remain oblivious to its impact. So on the fear quotient, taxes are clearly the more intimidating one.

And that’s not without reason. They are one hell of a beast. They make good returns look bad, taking a good measure of your earnings away. In extreme cases, they make people do unlawful things to evade them, but let’s not go there.

For long-term investors, what’s particularly hurtful is that taxes keep chipping away at your returns even when you only intend to fine-tune your investments (re-balancing, for example) while staying invested.

Therefore, being tax conscious is the duty of every sensible investor. While you can’t wish them away, it’s appropriate to use every legitimate trick to avoid them from becoming a wrecking ball to your finances.

Having said that, it becomes problematic when you make tax avoidance the end goal itself, which, in turn, starts driving your investment decision-making.

Recently, we saw that happening when the government announced the withdrawal of indexation benefit from certain types of funds, triggering a mad rush to invest in them before the new tax rules kicked in. Much has already been written about it, including by us, so I’d rather spare you the details.

Instead, I’ll talk about a tangential issue where I see tax-related inhibitions leading investors to suspend rational investment actions. One of them is the issue of switching from regular to direct mutual funds.

Bu hikaye Mutual Fund Insight dergisinin June 2023 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

Bu hikaye Mutual Fund Insight dergisinin June 2023 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MUTUAL FUND INSIGHT DERGISINDEN DAHA FAZLA HIKAYETümünü görüntüle
International Mutual Funds Find Flavour But Lose Favour
Mutual Fund Insight

International Mutual Funds Find Flavour But Lose Favour

Despite stellar performance, these funds are cold-shouldered by investors

time-read
3 dak  |
September 2023
The Dose Makes The Poison
Mutual Fund Insight

The Dose Makes The Poison

Are your fund investments diversified? Or are they diworsified? Here’s the solution

time-read
5 dak  |
September 2023
'Since Sahi Hai drive launch, industry has grown over twofold'
Mutual Fund Insight

'Since Sahi Hai drive launch, industry has grown over twofold'

The AMC’s marketing and corporate communication head also lauds MFCentral and MF Utility

time-read
3 dak  |
September 2023
'Earlier, not many knew of mutual funds; now SIP is a verb'
Mutual Fund Insight

'Earlier, not many knew of mutual funds; now SIP is a verb'

The CMO also explains how 4G, fintechs have elevated mutual funds’ reach

time-read
4 dak  |
September 2023
'MFCentral is the most impressive of online platforms'
Mutual Fund Insight

'MFCentral is the most impressive of online platforms'

Shah says though passive funds are growing, there’s a long road ahead

time-read
3 dak  |
September 2023
'Fintechs are driving mass financial inclusion'
Mutual Fund Insight

'Fintechs are driving mass financial inclusion'

Shah also lauds the pace at which distributors have embraced technology

time-read
2 dak  |
September 2023
'A Maldives tour guide knew of the Mutual Fund Sahi Hai drive'
Mutual Fund Insight

'A Maldives tour guide knew of the Mutual Fund Sahi Hai drive'

Interaction with Edelweiss’s senior VP and head of products and marketing

time-read
3 dak  |
September 2023
'More distributors will come to MFCentral, MF Utility'
Mutual Fund Insight

'More distributors will come to MFCentral, MF Utility'

Goyal feels they can grow their business five times, 10 times with tech

time-read
3 dak  |
September 2023
'The size of passive funds has grown 36 per cent in a year'
Mutual Fund Insight

'The size of passive funds has grown 36 per cent in a year'

Parija explains how mutual funds have gained traction

time-read
5 dak  |
September 2023
Tomorrow, and tomorrow, and tomorrow...
Mutual Fund Insight

Tomorrow, and tomorrow, and tomorrow...

There are a total of about 1.1 lakh crores of rupees invested in India’s mutual funds and the number of investors is now about 12 crore

time-read
4 dak  |
September 2023