What are the various taxes that I have to pay to buy,hold and sell mutual funds? - Raman Kumar In case of investments in equity mutual funds,long-term capital gains are exempt and short-term capital gains are taxed at the rate of 15%. If the investments are in debt mutual funds,long-term capital gains will be taxed at the rate of 10% without indexation or 20% with indexation,whichever is lower,and short-term capital gains are taxed as per the investors income slab. No other taxes are to be paid by you. Statutory turnover tax (STT) is levied directly by mutual funds when equity schemes are sold. Your cheque comes after deduction of STT in case of equity fund redemptions. Similarly,the dividend distribution tax in case of debt funds is also deducted by mutual funds. Hence,the only taxes that you need to pay are the relevant capital gains as mentioned above. What is the most cost-effective investment option: gold exchange-traded funds (ETFs) or fund-of-funds? - PSR Rao A gold ETF invests in physical gold and tracks the price of gold. You need a demat account to invest in a gold ETF and it does not offer SIP option. Gold fund-of-funds,on the other hand,target investors who wish to invest in gold and need not have a demat account. The fund invests in units of gold ETF. They are like any other open-ended fund and have the SIP option as well. Both the options aim at saving investors from the hassles of safekeeping of gold and finding quality gold. The fund-of-funds scheme has some expenses over and above the expenses of the underlying gold ETF in which it invests. These costs are transferred to the investors. If you have a demat account and wish to make lump sum investments,gold ETF should be a better option. For SIPs you have to go for fund of funds. What are child Ulip plans and is it really safe to do long-term planning with child Ulips? - Monica Sood A child Ulip,or unit-linked insurance plan,is best suited for children in the age group 5 to 15 years. These plans offer flexibility of withdrawal at stipulated intervals,ensuring that your childs education is insulated from the covered risks. Under a child Ulip,you can build a corpus by using a mix of debt and equity instruments and can even make a switch among the various investment styles available. Unlike a traditional plan,where you are required to pay a certain premium on the sum assured chosen by you,in a child Ulip,you can choose both the premium and sum assured as per your requirement. In case of the death of a parent,the child will immediately receive the sum assured and also in some policies continue to receive money at the stipulated time periods. You can also opt for various riders like income benefit rider and disability rider. * The writer is CEO,Investshoppe.com * Send your queries at fepersonalfinance@expressindia.com
