Stamp duty to pinch liquid fund returns further
From July 1, a stamp duty of 0.005% will be levied on every mutual fund purchase — be it through lump sum or systematic investment plans (SIPs). The lower the holding period of investments, the higher will be the impact. The move could impact large institutional investors who mostly put their money in liquid schemes for shorter time periods.
A report by ICICI Mutual Fund shows that the annualised returns could be lower by 1.82% due to stamp duty for holding period of a day. For seven days, the returns fall by 0.26%. As the holding period increases, the impact would be less. If the investments are held for 15 days, the investor could take a 0.12% hit, while for 30 days, the impact would be 0.06%.
https://economictimes.indiatimes.co...ofinterest&utm_medium=text&utm_campaign=cppst
When the annual return on any fund is hardly approx 6% - 8%, putting an additional tax on a digital product does not serve any purpose. In fact there is no service being provided on the transaction by the stamp duty guys. There is no paperwork, physical inspection, register / record keeping and no rubber stamp impression on any document involved. So on what basis is this really levied. There is no physical stamp and no record being maintained by the stamp guys, just a reporting by Mutual fund houses.
This according to me is baseless and illegal. Mutual fund houses should take this up and have the stamp duty abolished.
From July 1, a stamp duty of 0.005% will be levied on every mutual fund purchase — be it through lump sum or systematic investment plans (SIPs). The lower the holding period of investments, the higher will be the impact. The move could impact large institutional investors who mostly put their money in liquid schemes for shorter time periods.
A report by ICICI Mutual Fund shows that the annualised returns could be lower by 1.82% due to stamp duty for holding period of a day. For seven days, the returns fall by 0.26%. As the holding period increases, the impact would be less. If the investments are held for 15 days, the investor could take a 0.12% hit, while for 30 days, the impact would be 0.06%.
https://economictimes.indiatimes.co...ofinterest&utm_medium=text&utm_campaign=cppst
When the annual return on any fund is hardly approx 6% - 8%, putting an additional tax on a digital product does not serve any purpose. In fact there is no service being provided on the transaction by the stamp duty guys. There is no paperwork, physical inspection, register / record keeping and no rubber stamp impression on any document involved. So on what basis is this really levied. There is no physical stamp and no record being maintained by the stamp guys, just a reporting by Mutual fund houses.
This according to me is baseless and illegal. Mutual fund houses should take this up and have the stamp duty abolished.