Last updated: 02 Jul, 2020 | 03:52 am
From July 1, 2020, a stamp duty of 0.005% will be imposed on the purchase of mutual funds. Here are a few important points:
How will your returns be impacted?
Scenario: Suppose you wish to invest ₹1 crore into Overnight Funds. The table below shows the impact on your returns for holding periods of 1 day, 7 days, 15 days and 1 month.
Scenario: Suppose you wish to invest ₹1 crore in Liquid Funds. Here’s how your returns would be impacted for different holding periods of 15 days, 1 month, 3 months and 1 year due to the stamp duty.
The above tables show that the impact of stamp duty would be the highest at 1.83%. (0.005%*365= 1.83%), if the holding period is just 1 day in case of Overnight Funds. However, as your holding period increases, the annualised impact on your return is reduced. If you hold the fund for 1 year, the impact is reduced to just 0.005%.
Overall, the stamp duty imposed will not affect the returns of your long-term investments. Reach out to your personal family wealth office to help you manage your mutual fund investments.