Comments on: Rebalancing using a MIP

By: Banyan Financial Advisors

Banyan Financial Advisors — Fri, 20 Jul 2012 12:43:57 +0000

Apologies, I would also like to refer the link http://insight.banyanfa.com/tax-implications-of-mutual-funds-on-residents-and-nris/ which explains the overall tax impact of Mutual Funds (including MIPs) on resident Indians & NRIs.

By: Banyan Financial Advisors

Banyan Financial Advisors — Fri, 20 Jul 2012 12:41:03 +0000

Subra,
Very nice article on MIPs. I would also like to add upon another tax impact – DDT deducted by MF house is actually around 15%. Hence, even though the dividend is tax free in the hands of the investor, it is pretaxed. If you are an investor who has income less than 2lac, it would be much wiser to go for the Systematic Withdrawal method so that your income from MIP is taxed as a Capital Gain which is exempt upto the limit of Rs. 2lac (Normal Income + CG).

What is your opinion on this ?

By: Dominic

Dominic — Fri, 20 Jul 2012 10:17:57 +0000

Putting money in MIP does not make any sense. There is no security and no long term growth. My opinion.

By: arjun

arjun — Fri, 20 Jul 2012 01:14:05 +0000

Wouldn’t an MIP eventually run out of its corpus ?

By: Vandhana Karthick

Vandhana Karthick — Thu, 19 Jul 2012 19:20:01 +0000

Subraji

Suggest the best MIP to get our money multiplied in current economic situation.

Thanks
Vandhana Karthick

By: Rajeev

Rajeev — Thu, 19 Jul 2012 05:39:10 +0000

Subra,

After the fund pays Dividend Distribution Tax, the returns will be lower than a pure debt fund with SWP.

Why would people prefer MIP’s over a pure debt fund?

Equity exposure can also be taken by investing in a balanced fund or pure equity fund to the extent of one’s risk apetite. There are also other ways like Senior Citizens saving Scheme and PPF.

I think the term Monthly Income Plan must be attracting retirees who are used to a regular salary in their working life. SWP’s can do the same job. SWP’s can be done in all types of funds i believe.

Regards

By: Ajay

Ajay — Thu, 19 Jul 2012 05:30:11 +0000

Krishna

FD are not tax efficeint, on the other hand in MIP you can claim indexation benefits on tax.

By: sujatha

sujatha — Thu, 19 Jul 2012 05:01:23 +0000

Because FDs are taxed more?

By: Krishna

Krishna — Thu, 19 Jul 2012 02:07:09 +0000

Subra,

Why you are recommending MIP in place of SCSS and the FD which offer better compared to MIP’s even though they are 100% Debt product

Regards
Krishna