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How much SWP to withdraw from 10 lakhs

Can you suggest Mutual Funds to invest lumpsum of 10 Lakhs so that a SWP of 15,000 can be opted after 1 year and how much would be the actual amount paid in tax for every SWP. I can take high risk and also have option of delaying SWP to 3 years as well. Thank you for such simple and informative article's look forward to more readings and posting queries?

Apr 17, 2017 by Dhiraj, Pune  |   Mutual Fund

At the outset, we thank you for the kind words. We are glad that you like our content and found it informative yet simple! This encourages us to continue our good work.

If you want to withdraw Rs 15,000 monthly as SWP by investing Rs 10 Lakhs then it is a huge withdrawal. It comes to 18% annual withdrawal. We think, if you want to start withdrawing after one year, then invest in balanced funds and do not withdraw more than Rs 8,000 (annual 9.60%) during the initial years. Check how the SWP evolves after monthly withdrawals over 2-3 years and then increase / decrease the monthly SWP amount based on the corpus at that point in time.

Some of the balanced funds that you may consider investing in are ICICI Prudential Balanced Fund, SBI Magnum Balanced Fund, DSPBR Balanced Fund and L&T India Prudence Fund.

However, you have talked about taking high risk and waiting for 3 years to start the SWP. In that case, you may invest in diversified equity funds and wait for 3 years, check the corpus after 3 years and then decide how much you should withdraw? That would be a better strategy. Some of the top performing diversified funds are - ICICI Prudential Value Discovery Fund, Birla Sun Life Advantage Fund, Kotak Select Focus or Mirae Asset India Opportunities.

Capital gains arising out of each monthly SWP withdrawals from balanced funds and diversified equity funds after one year is totally tax free.

Hope you find the above useful. Thanks

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