SIP Mutual Fund Tax in Wife’s Name: The Indian stock market has witnessed great volatility in the last few months due to global tensions, which has also affected the mutual fund portfolio
However, long-term investors are not very worried about this. The number of people investing in mutual funds has increased rapidly in the last few years, with women and small investors participating in large numbers. These days, many employed or business men are investing in Mutual Fund SIP in their wife’s name. If you are also thinking like this, then it is very important to have clear information about the tax rules.
What are the tax rules if you do SIP Mutual Fund Tax in Wife’s Name?
Capital gains tax has to be paid on the return you get after investing in Mutual Fund SIP. The most important thing is that the tax rules are the same for both men and women in Mutual Funds. This means that even if you are doing SIP in your wife’s name, you will still have to pay tax like a normal investor.
How is capital gains tax levied?
Capital gains tax is classified in two ways.
A. Equity Funds
Short-term capital gains: If you sell units of an equity mutual fund and withdraw the money within 1 year, you have to pay short-term capital gains tax at the rate of 20%. Long-term capital gains: If you withdraw the money after 1 year, you have to pay long-term capital gains tax at the rate of 12.5%.
B. Debt Funds
You have to pay tax on the returns on debt funds as per your tax slab. This return is added to your total annual income. Tax Planning It is a common misconception that while doing SIP in the name of your wife, you get some special exemption to save tax. However, as per the tax rules, the gender of the investor is not taken into consideration. Your wife’s separate PAN card is used as the investor while filing taxes. If your wife’s income slab is lower, then you can get tax relief on LTCG to some extent. However, there is no change in the normal rates. Therefore, it is more important to focus on financial lanning and risk management rather than tax savings while investing in your wife’s name.
Follow for more: MoneyIndices!
