A new investor needs to first invest in a SBI Mutual Fund scheme and then opt for this facility.
SBI Mutual Fund on Thursday announced the introduction of Bandhan SWP, a tax efficient option to send monthly cash flows from their mutual funds investments to the individual's immediate family member.
At a press conference held in Mumbai, the fund house said that this facility will be offered to both new and existing SBI Mutual Fund investors to withdraw a specified sum of money on a monthly basis, from their own investment in a growth option of an open-ended mutual fund scheme.
A new investor needs to first invest in a SBI Mutual Fund scheme and then opt for this facility. The beneficiary, can be the investor's spouse, parent, child or sibling, has to be resident individual only, and not hold NRI status.
The existing investors who have their investments under dividend payout and dividend reinvestment option may also avail of this facility by switching their investments to the growth option.
The minimum withdrawal amount if Rs 5,000 per month for a period of 12 months.
At the launch, DP Singh, Executive Director and Chief Marketing Officer (Domestic Business), SBI Mutual Fund said, 'Bandhan SWP' is tax-efficient solution as any fund transfer to immediate family members as it is considered as a gift under the law and does not attract any taxation. The SWP is more beneficial than a dividend payout option.
Agreeing with Singh, Anuradha Rao, Managing Director and Chief Executive Officer, SBI Mutual Fund added, "SWP is the most tax efficient solution for individuals in the current tax regime".
Singh also said that currently the option can be availed for a single relation, however, going forward it would be offered for multiple relations as well.
"The facility can be used extremely well by middle-aged investors and those approaching retirement," he added.The announcement comes in the wake of a a 10 percent tax on distributed income from equity-oriented mutual funds as well as 10 percent tax on long-term capital gains exceeding Rs 1 lakh from equities.