Equity mutual funds are expected to benefit from a Union Budget move to introduce taxes on investments in unit-linked insurance plans (ULIPs) exceeding ₹2.5 lakh in a fiscal year.
Updated Feb 02, 2021 | 07:31 IST
Presently proceeds received on life insurance policies including ULIPs enjoy tax exemption under section 10(10D) if the premium for the policy does not exceed 10% of the sum assured. Representational image
The finance minister has proposed amendments in the Income Tax Act in an attempt to make the Unit Linked Insurance Policies (ULIP) issued by life insurance companies on par with listed equity investments.
Present Provisions
Presently proceeds received on life insurance policies including ULIPs enjoy tax exemption under section 10(10D) if the premium for the policy during the premium paying term does not exceed 10% of the sum assured. So as long as the premium paid does not exceed 10% of the sum assured the money received in respect of such policies is fully tax-free in the hands of the policyholder. However, death claims received are fully tax-free irrespective of the quantum of premium paid.
Synopsis
This week the Sensex fell around 3000 points, after touching the historic high of 50,0000.
ETMutualFunds.com asks mutual fund advisors and financial planners every week for a list of frequently asked queries by their clients. This week the Sensex fell around 3000 points, after touching the historic high of 50,0000. We spoke to Raj Talati, Founder, ABM Investment, a financial advisory firm, based in Vadodara, to understand what retail mutual fund investors should do at this point.
Questions asked by investors:
1. Will the market
BY
Synopsis
Mutual funds should be perceived as a longer-term investment vehicle at par with comparable investment avenues like gold and real estate with the investment horizon for 7 to 10 years especially the equity funds.
Getty Images
Investing in Mutual funds can make a significant contribution when it comes to the development of the Indian Economy. We believe the development of the capital markets enhances the four pillars of the financial system: efficiency, stability, transparency, and inclusion. Mutual fund industry has been at the forefront of this growth. The Mutual Fund industry is still under-penetrated with a few impediments thwarting its growth, we need to address these hurdles which could help deepen investments in Mutual Funds and hence drive growth in capital markets. Mutual funds should be perceived as a longer-term investment vehicle at par with comparable investment avenues like gold and real estate with the investment horizon for 7 to 10 years especially the equit
While the equity markets are trading at higher than historical averages on conventional valuation metrics, strong global liquidity and a low cost of capital environment in India as well as globally, place equity as a relatively better asset class in the near to medium term, says Ravi Menon of HSBC Global Asset Management, India.