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How to get regular return from SWP investments

I want to know about the SWP. I have to invest Rs 12,00,000 with Rs 8,000 withdrawal per month. Which are the best options for it. Should I invest in SWP or some where else?

May 18, 2017 by Sumit Sharma, Gwalior  |   Mutual Fund

As you want to know about SWPs, we suggest you to read the following blogs on our website -

SWP from debt mutual funds give the most tax efficient returns https://www.advisorkhoj.com/company/Principal-Mutual-Fund...

Mutual Fund SWPs are smart option for income needs https://www.advisorkhoj.com/articles/Mutual-Funds...

SWP from balanced fund is a smart option to get regular returns https://www.advisorkhoj.com/articles/Mutual-Funds...

Once you have gone through the above you may now know that you can do SWP from hybrid debt funds, debt funds, balanced funds or for that matter any other category of funds. However, the funds chosen should be matching to your risk profile. Hybrid debt funds and balanced funds can be a good choice if your risk profile is moderate and investment horizon minimum 5 years. You can invest in hybrid debt funds or balanced funds or a mix of both and draw a fixed amount every month. However, if you are drawing from hybrid debt funds (MIPs), gains from each withdrawal upto 3 years will attract short term capital gains tax and taxed at your current tax slab rate. After 3 years, the gains will be treated as long term capital gain tax. For debt/ hybrid funds long term capital gain is taxed @20% after indexation.

However, if you are doing SWP from balanced funds, gains made in each withdrawal upto 12 months will be treated as short term capital gains whereas all gains made on SWP withdrawals after 12 months will be treated as long term capital gains, which is tax free in case of balanced funds and equity funds.

The other way to get regular return is to invest in good performing hybrid debts funds or balanced funds which has a consistent track record of paying monthly dividends. You can check this tool and know which are these funds https://www.advisorkhoj.com/mutual-funds-research/categorywise-dividends

Once you have decided which way to invest in for getting regular returns - SWP or monthly dividend - you can choose few good funds and start investing

In case you need further help do write back to us through the comment section given at the bottom of your query reply. Thanks for writing to Advisorkhoj.

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