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Stamp Duty on Mutual Funds i.e. 1st July20

FAQs

Q: How much?

Ans: For all Purchases in MFs, u will pay stamp duty of 0.005% i.e. Rs. 5 for every Rs. 1 lac invested

Q: When u say I have to pay stamp duty, how will I pay?

Ans: When u purchase a MF, Stamp Duty will auto-deducted and paid to govt. U don't have to do anything For e.g.: if u invest 1 lac in any MF, the RTA (CAMs or Karvy) will deduct Rs. 5 (0.005%) as Stamp Duty from this

Q: When I sell MFs, will stamp duty be applicable?

Ans: No. Only when u purchase MFs,

Q: Is it applicable on my existing MFs also?

Ans: No, it is only on fresh purchases from today. Existing units, no impact

Q: On SIPs?

Ans: Yes on SIPs too

Q: On STPs?

Ans: Yes

Q: My SIP started 2 years back, so will I still pay Stamp Duty

Ans: Yes, for all buy transactions from today. SIP is a purchase. So for your SIP installments from today - irrespective if u started SIP before - Stamp Duty will be levied

Q: So should I stop SIP?

Ans: Nahin yaar!

Q: For STP - Explain in detail

For e.g.: First say I put 1 lac in liquid fund and from their shift 10k every week to equity fund First stamp duty will be charged on 1 lac Then every time 10k shifts to equity - since it is purchase of equity fund - u pay again stamp duty

Q: For Switches?

Ans: Same rule applies. Every time u switch, it is considered as a buy in the Switch-in scheme

Q: Isn't this double Stamp Duty? Ans: No. Switch or STP is just a simple mechanism to help transaction. It is a sell and buy.

Q: But is it only for Demat mutual Funds?

Ans: Stamp Duty is for both kinds of units - Demat units also and normal account statement units also. Q: I buy DIRECT mutual funds? For me will I pay stamp duty Ans: Yes, even if u buy DIRECT MFs

Q: I buy on Fund House website, Will I pay Stamp Duty?

Ans: Doesn't matter where you buy from, Stamp Duty is applicable

Q: But I don't buy on Stock Exchange, will I still pay Stamp Duty

Ans: YESSSS! Please understand from wherever you buy MFs, u will pay it

Q: So will Stamp Duty reduce my returns?

Ans: You pay 0.005% as Stamp Duty. That is a negligible amount. If you are a long term investor - there is no significant impact. Don't worry

Q: Which types of MFs - Debt also or only Equity MFs?

Ans: On all kinds of MFs

Q: So for liquid funds, overnight funds also?

Ans: Yes all kinds of MFs

Q: For ETFs?

Ans: Yes on ETFs also

Q: FMPs, Close Ended Funds?

Ans: Yes

Q: Can u please give example?

Ans: Let's say you invest, Rs. 1 lacs in a fund with NAV of Rs. 20 Earlier u would have got 5000 units (1 lac/20) Now u will get 4999.750 units. ( 1 lac - Rs. 5)/20 So it marginal impact

Q: If I invest 1 lac, I will now get units for 99,995 for purposes of tax calculation i.e. LTCG or STCG what will be my cost of acquisition

Ans: No Change Earlier: Cost 1 lac Now: Cost 1 lac (Stamp Duty is considered and included as your cost of acquisition)