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Is the amount taxable if someone invests 10 lakh in diversified or balanced funds & get SWP 8000 per month

I read always your blog that If someone invest 10 lakh in diversified/balanced funds & get SWP 8000 pm. The amount is tax free or not please clarify?

Aug 30, 2016 by S R Jain,   |   Mutual Fund

The capital gains arising out of the amount withdrawn as SWP from your lump sum investments in diversified equity funds or balanced funds could be tax free only if the SWP withdrawals start after 12 months from the date of investments.

Capital gains arising from the SWP withdrawals within and upto one year will be treated as short term and taxed accordingly. Currently the short term capital gain tax for equity and balanced fund is 15% + 15% Surcharge + 3% Cess = Total 17.7675%.

Therefore, if you want to opt for SWP and can wait for one year after investing, then that is the best option to receive the tax free amount.

Please read the following which is relevant to your query –

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