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Mutual Funds with Instant Redemption Facility:

Smarter way to invest and grow your ideal money:Ultra short term or Liquid funds

As emergency can come any time,number of mutual funds have come with instant redemption facility where money will be credited in linked saving account instantly or within certain period of time like 30 minutes.

Mutual Funds with Any Time Redemption Facility

Currently following funds are offering instant redemption facility:

  1. Reliance money manager fund.
  2. DSP Blackrock Money manager fund.
  3. UTI Money Market fund.
  4. SBI Savings Fund.

What investors need to remember while opting for instant redemption facility:

  1. To opt for this facility,IFSC code need to be registered in the folio.
  2. Investors registered bank need to be Immediate Payment Service (IMPS) enabled.
  3. Facility may available for transactions made only through website or mobile app.
  4. Most of the funds have kept daily redemption limit as Rs.2 Lakh. But if you have opted for Reliance MF Any Time Money Card,limit for instant redemption will be 50% of valuation with upper cap of Rs.2L.
  5. Routine offline redemption facility available as it is.

Risks associated :

  1. Investor can face technical issue while transacting online or through app.
  2. Most of the funds offering this facility have modified duration up to 1 year so investor need to have sufficient investment duration.

Rest this is good value added facility by mutual funds and investor can take benefit of the same.

What is CKYC in Mutual funds:

CKYC – Centralized KYC – an initiative of Govt Of India  which will be administered by CERSAI – Central Registry Of Securitization Asset Rsconstruction And Security Interest Of India.

Central KYC Registry will be a centralized repository of KYC records of investors in the financial sector with uniform KYC norms allowing inter-usability of KYC records across the financial sector.

W.e.f. February 01, 2017, new mutual fund investor will need to comply with new CKYC procedure.

Mutual fund investors will be categorized as below:

  1. New investors who are not KYC compliant: Such investors will need to use new CKYC form or KYC KRA form along with additional supplementary CKYC form.Mutual fund companies may accept this supplementary form for limited period of time only.
  2. Existing KYC compliant mutual fund investor :For now, there are no new requirements to be fulfilled by existing KYC compliant investors.
  3. Existing CKYC compliant investors:No further KYC formalities are required.

The objective of CKYC is to allow investors to complete KYC formalities only once and make this information available across all the entities in the finance industry and not limited to securities.

CKYC compiled investors will be provided with 14 digit KYC identification (KIN) which confirms their KYC compliance.

Click here to download CKYC application form.

Budget 2017 & Outline Of Its Impact On Tax Saving,Mutual Funds ,Real Estate & NPS

Budget 2017 and its impact on personal Tax Saving,Mutual funds,Real Estate & NPS

Changes proposed in personal income tax slab:

  1. Tax rate for individuals having income in the range of Rs.2.50,000 to 3,00,000 reduced from 10% to 5%.
  2. Rebate of Rs.5000 u/s 87A have reduced up to Rs.2500/-.This rebate will now available if taxable income is upto Rs.3,50,000.
  3. 10% Surcharge if annual taxable income is in between 50 L and 1 Crore.
  4. No change in surcharge of 15% on taxable income above Rs.1 Crore.

Changes proposed in Mutual funds:

No major changes have proposed for mutual funds except:

  1. RGESS – Rajiv Gandhi Equity Saving Scheme which was available for first time equity investors will be phased out.
  2. Provisions of LTCG -Long Term Capital Gains for equity remains as it is.

Changes proposed in NPS:

  1. Budget 2017 proposes tax exemption for partial withdrawal (up to 25% of contribution)  made in specific cases.

Budget 2017 and its effect on Real Estate:

  1. LTCG has been tweaked for real estate.Holding period reduced up to 02 years from earlier 03 years to be eligible for long term capital gains.
  2. Individuals and HUFs paying rent of more than Rs.50,000 will need to deduct 5% tax at source.It can be done once in a year (from rent for last month of financial year).
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