Updated Apr 14, 2021 | 06:15 IST
Financial advisors are recommending clients to hold 10-20% of their portfolios in international equities as a hedge against the vagaries of the domestic market. International mutual funds
New Delhi: Indian equity markets fell sharply on Monday the BSE Sensex and the Nifty fell sharply (nearly 3.5% each) as rapid surge in fresh Covid infection cases raised fears of lockdown. However, other global markets did not perform as badly as Indian market. Financial advisors are recommending clients to hold 10-20% of their portfolios in international equities as a hedge against the vagaries of the domestic market so that a part of their portfolio remains insulated.
Does the tax on ULIPs reduce their edge over mutual funds?
Purely from an income-tax angle, ULIPs with premiums lower than Rs 2.5 lakh may work out better than mutual funds February 15, 2021 / 09:06 AM IST
When Union Budget 2018 introduced a long-term capital gains (LTCG) tax on profits made from equity-oriented investments, it handed unit-linked insurance plans (ULIPs) a distinct advantage. Despite a majority of the investments flowing into their equity funds, ULIPs escaped this tax due to their status as life insurance policies.
Union Budget 2020, however, has sought to fix this ‘arbitrage.’ Redemption or maturity proceeds of ULIPs with aggregate annual premiums of over Rs 2.5 lakh will now be subject to capital gains tax, just as mutual funds are. However, if the policy pays out a claim due to the policyholder’s demise, the dependents will not have to pay any tax.
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.
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