Moneycontrol
HomeNewsBusinessPersonal FinanceTax implications in case of using STP, SWP and SIP
Trending Topics

Tax implications in case of using STP, SWP and SIP

Dr. Renu Pothen, Research Head of Fundsupermart.com explains what are the tax implications in case of using STP, SWP and SIP.

January 15, 2014 / 15:45 IST
Story continues below Advertisement

Your browser doesn't support HTML5 video.

In the case of SIP every investment is considered as a fresh investment. So if you have to get the benefit of long-term capital gains then each investment has to be held for a 12-month period.

In the case of STP where you are moving money from a debt fund to an equity fund if the surplus is actually being moved from the debt fund in less than one year then it will be taxed as per your income slab, otherwise the normal debt taxation will be applied, that is 10 percent without indexation and 20 percent with indexation.

Story continues below Advertisement

As far as SWP is concerned, here we are actually withdrawing a certain amount of money at particular intervals. If it is a debt fund and we are growing for growth option, if we are withdrawing the money in less than one year it is as per your tax slab, if it is more than one year it is 10 percent without indexation and 20 percent with indexation.

If you are doing an STP, SWP from an equity fund, if you withdraw it after a period of one year then the long-term capital gains is nil.

first published: Jan 15, 2014 01:14 pm

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!