So, the last quarter of financial year 2018 is over and its time to run the tax formalities. It is the time when even the most positive person on the planet falls prey to the tax worries; How much am I going to pay this year? Will the bill ever get easy on my pocket? What if I am not able to pay off my liability? Will I face prosecution?; these are some of the most common issues that make us loose our sleep. But not anymore! With SBI Magnum Tax Gain Dividend Fund, you can devise a full-proof tax saving plan and put a check on your soaring tax liabilities. Let’s learn more about this fund and understand how exactly does it work.
The Initials
SBI Tax Gain (D) is an equity-oriented, tax-saving plan of the ELSS category. It was launched more than two decades ago in 1993, and has ever since served thousands of customers and helped them save on their tax bills. It belongs to one of the largest and most respected fund houses of India, SBI Mutual Fund. MySIPonline and other big online investment portals have listed this scheme on their recommended page on many occasions, which testifies that it is indeed one of the glorified schemes to invest in India.
How Does it Work?
Usually, a dividend plan is chosen by an investor to meet the inevitable routine expenses, because he gets paid in the form of dividend at regular time intervals. SBI Magnum Tax Gain Fund - Dividend Plan invests in the stocks of the companies that pay profits to its potential stakeholders in the form of dividends. The dividend so distributed by the companies is then passed on by the AMCs to its unit holders.
Do These Dividends Get Taxed?
Yes. With the amendment brought in by the finance minister in the latest budget, dividends paid on equity-oriented mutual funds will now be taxed to the tune of 10% of the total income distributed on or after 1st April, 2018. Thus, if you were to receive a dividend of Rs. 1000, you’ll now receive a post-tax amount of Rs. 900 in your bank account.
How Does the Fund Help in Tax-Saving?
As discussed earlier, SBI Magnum Tax Gain Scheme is an ELSS mutual fund, and thus qualifies for the deduction available in Section 80C of the Income Tax Act, 1961. According to this section, any investment made in the modes stated thereunder will automatically get qualified for a maximum deduction of Rs.1,50,000 from the annual taxable income. This means you can easily save up to Rs. 46,350 on your taxes. Further, there is an inherited lock-in of three years in this scheme which doesn’t allow any withdrawal or redemption before your investment hits maturity. Thus, you can stay carefree about the exit load expenses.
How Much Do You Need to Spend?
Not much. The SBI Magnum Tax Gain NAV stands at only Rs. 42.406 as per the data released on 18th April, 2018, which is a decent price for a fund that provides both regular income and tax benefits.
Hence, if you are amongst those who aren’t willing to take a lot of risk for their investments, are desperate to find a solution for their soaring tax liabilities and also don’t want to run behind on their rent, then SBI Magnum Tax Gain (D) is just made for you. However, be informed that this fund is a dividend scheme and not a growth option. So, if you are looking forward to build wealth over the course of your investment, then it is suggested that you pick growth schemes as dividend plans do not have the compounding feature. There are tons of high quality schemes available on MySIPonline. Check them out today!
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