Starting July 1, 2020 Stamp duty would be levied on various transactions in Mutual Funds. This post explains the impact of stamp duty on mutual funds on your investments.
What is the rule on Stamp Duty on Mutual Funds?
Stamp duty would be levied on purchase and transfer of mutual fund effective July 1, 2020. The stamp duty would be 0.005% in case of purchase and 0.015% in case of transfer.
Purchase of Mutual Fund can be following scenarios:
- New investment in Mutual Funds using Direct method or through intermediaries
- Purchase through SIP (including SIPs which started on a back date)
- Switch-in of units
- STP (Systematic Transfer Plan)
- Dividend reinvestment
These type of purchase transactions would attract 0.005% stamp duty. This means Rs 5 for every Rs 1 Lakhs.
Transfer of Mutual Funds can be:
- Purchase of ETFs or close ended mutual funds through stock exchanges
- Transfer of mutual fund units…