Beruflich Dokumente
Kultur Dokumente
ON
‘ROLE AND CONCEPT OF MUTUAL FUNDS’
(Conducted on behalf of ‘NJ INDIAINVEST PVT. LTD.’)
[From 15th January, 2004 to 15th March, 2004)
A Project Report submitted in partial fulfillment of the requirements
For the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
TO
SOUTH GUJARAT UNIVERSITY, SURAT
Submitted By:
Under the guidance of
PROF. PARITA BENGALI
Submitted To:
March 2004
NJ IndiaInvest
1. The first & main objective of the firm is to provide financial services to
investors.
3. To crate awareness of mutual fund among the people & to prove that
the mutual is that the mutual fund is one of the best investment avenues
available to satisfy any kind of investment need.
At NJ, people are education centric, the relationship managers will help
you in identifying & understanding your needs and help you develop a
portfolio across different asset classes commensurate to your needs, the
experts will give a feel on the various asset classes and explain you the
risk associated with each in a simple and lucid manner to put you at calm.
Once the investment made will be backed by periodic valuation reports
and regular relevant information through newsletters, mailers, e-mail,
road shows etc.
The prime concern of the people at NJ is to help you attain peace of mind
on the investment front.
The mutual funds are becoming the most popular investment vehicle
offering various kind of scheme with different investment objectives. An
investment through mutual funds is one of the safest, easiest &
convenient ways of the successful investment making. The investments
are in congruence to the laid down investment objectives securing the
goals & objectives of the unit holders.
A plethora of mutual fund schemes with different features makes the right
choice for an investor difficult. NJ has a dedicated task force to analyze
the different schemes of mutual funds across various parameters on an
ongoing basis. An arduous process with strict disciplinary levels is
followed before offering any product, scheme or recommendation, as NJ
believes that it is morally bound as trustees to its client’s investments.
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The following are the main products rack for which NJ India invest
provide services to the clients.
Mutual Funds
Fixed Deposits
Infrastructure Bonds
RBI Relief Bonds
Approved securities for charitable trust
Insurance
NJ-SERVICE DIFFENTIAL: -
1. Meritorious selection of funds
2. Understanding clients needs
3. Designing of portfolio mix
4. Evaluation of different schemes of mutual funds.
Example:
Monthly income schemes for the investor who wants monthly & regular
income.
advises to investors for minimum risk & maximum returns i.e. for
optimum investment option.
Head office: -
Other centers: -
Ahmedabad: Bhavnagar:
707, 7th flr, Sakar V, B/h. Natraj Cinema, 110, Madhav Hill, Wagavadi Rd,
Ashram Rd., Ahmedabad-380 009. Bhavnagar-364 001.
Tel.: 079-6583518/19 Tel.: 0278-2415550
Fax: 079-6425570 Fax: 0278-252341
Mobile: 98241-06294 Mobile: 94262-88690
E-mail: manish@njindiainvest.com E-mail: jignesh_bh@njindiainvest.com
Anand: Meshana:
B-17, vaibhav Towers, 133, 4th Floor,
Anand Vidhya Nagar, Anand. Mahatma Gandhi Shopping Centre,
Tel.: 02692-249433 Rajmahal Rd, Mehsana-1
Mobile: 98244-76660 Mobile: 98244-76444
E-mail: anand@njindiainvest.com E-mail: rahul@njindiainvest.com
Bangalore: Mumbai:
s-418, Manipal center, s-block, 94-‘b’, Mittal Tower,
47, Dickenson Rd, 210, Nariman Point, Mumbai-400 021
Bangalore-560 042. Tel.: 022-5632 5264/65/66
Tel.: 080-5092444 Fax: 022-5632 5267
Mobile: 98454-25604 Mobile: 98200-83758
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Baroda: Navsari:
313, Sidharth Complex, Nr. Hotel Express, 104, Diamond Trade Centre,
R.C.Dutt Rd., Alkapuri, Sattapir, Sayaji Rd.,
Baroda-5 Navsari-396 445.
Tel.: 0265-2337757 Tel.: 02637-253782
Mobile: 98241-06293 Fax: 02637-256229
E-mail: vinay@njindiainvest.com E-mail: sheetal@njindiainvest.com
Rajkot: Surat:
528, Star Chamber, 11/1236, Nanavat Main Rd,
Harihar Chowk, Surat-395 003
Rajkot-1 Tel.: 0261-2425995, 2429284,
Tel.: 0281-227616 Fax: 0261-2453014
Mobile: 98243-75756 Mobile: 98241-14952
E-mail: prashant@njindiainvest.com E-mail: parar@njindiainvest.com
Valsad: Vapi:
108, Amar Chamber, 108, Royal Arcade Chambers
Station Rd, Near G.I.D.C. Office Char Rasta,
Valsad-396 001 Vapi-396 195
Tel.:02632-244193 Mobile: 98244-76333
Mobile: 98244-76556 E-mail: himanshu@njindiainvest.com
E-mail: paras@njindiainvest.com
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2.1 INTRODUCTION
In the current situation every person wants some returns from his surplus
amount or if he has more money than he need for current consumption,
then he is a potential investor. Generally he may deposit his surplus in a
bank account to earn a fixed rate of interest or purchase a speculative
share on the stock market or buy gold or contribute to a provident fund
account or buy a piece of art or invest in some other form. Whatever his
decision, he is essentially making a sacrifice in the present in the hope of
deriving benefits in future. Every investment decision has two key
aspects:
1. Time
2. Risk
While the sacrifice occurs in the present & is certain, the benefits come in
future & may be uncertain.
2.2 INVESTMENT
Certain features characterize all investments. The following are the main
characteristic features if investments: -
1.Return: -
All investments are characterized by the expectation of a return. In fact,
investments are made with the primary objective of deriving a return. The
return may be received in the form of yield plus capital appreciation. The
difference between the sale price & the purchase price is capital
appreciation. The dividend or interest received from the investment is the
yield. Different types of investments promise different rates of return.
The return from an investment depends upon the nature of investment,
the maturity period & a host of other factors.
2.Risk: -
Risk is inherent in any investment. The risk may relate to loss of capital,
delay in repayment of capital, nonpayment of interest, or variability of
returns. While some investments like government securities & bank
deposits are almost risk less, others are more risky. The risk of an
investment depends on the following factors.
a. The longer the maturity period, the longer is the risk.
b. The lower the credit worthiness of the borrower, the higher is the
risk.
c. The risk varies with the nature of investment. Investments in
ownership securities like equity share carry higher risk compared
to investments in debt instrument like debentures & bonds.
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3. Safety: -
4. Liquidity: -
1. Retirement planning: -
For examples: -
Unit linked insurance plan,
Life insurance,
National saving certificates,
Development bonds,
Post office cumulative deposit schemes etc.
3. Rates of interest: -
4. Inflation: -
5. Income: -
More avenues for investment have led to the ability & willingness of
working people to save & invest their funds.
6. Investment channels: -
For example: -
Fixed deposit in corporate sector
Unit trust schemes
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Equity
Shares
Mutual Fund
Schemes
Tax Sheltered
Schemes
Deposits
Life Insurance
Precious
Objects
Real Estate
Financial
Derivatives
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Growth schemes
Income schemes
Balanced schemes
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After one year, the Massachusetts investors trust grew from $50000 in
assets in 1924 to $392000 in assets (with around 200 shareholders). In
contrast, there are over 10000 mutual funds in the U.S. today totaling
around $7 trillion (with approximately 83 million individual investors)
according to the investment company institute.
Not all people understand the dynamic and the complexities of the
financial markets- whether it is the share market or any other financial
market. The retail investor goes on the sentiments of the market without
actually studying the fundamental of the security in which an investment
is being made. Moreover the retail investor usually does not have large
sum of money and this can be done on a regular basis.
per month. Now for a single household to pay Rs 2000/- every month, it
would be a heavy burden.
Now if all the households got together and shared the cost then it would
make a better economic decision. Because all the residents of the housing
society have the same need and therefore it makes sense to pool together.
For this act of pooling together you approach the residents’ welfare
association (RWA). All the 100 flat owners contribute Rs 20 per month
and ask (RWA) to appoint a security guard. Now it is the RWA’s
responsibility to ensure that the security guard is doing his job
effectively. They also monitor his performance. If the RWA is unhappy
with the security guard they can change the guard. The members keep
contributing. If one flat owner sells his flat and moves out of the society,
another flat owner takes his place and starts contributing.
Now in a mutual fund structure there is a trust, which is like the members
of the c0-operative society. The asset management company is something
like the RWA who is responsible for getting the right kind of security
guard and monitoring whether he is doing the right kind of job or not.
And lastly the security guard is the investment.
management can minimize risk. Mutual Funds help to reduce risk through
diversification and professional management. The experience and
expertise of Mutual Fund managers in selecting fundamentally sound
securities and timing their purchases and sales help them to build a
diversified portfolio that minimizes risk and maximizes returns.
By Structure
Open-end Funds
An open-end fund is one that is available for subscription all through the
year. These do not have a fixed maturity. Investors can conveniently buy
and sell units at Net Asset Value ("NAV") related prices. The key feature
of open-end schemes is liquidity.
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Closed-end Funds
Interval Funds
By Investment Objective
Growth Funds
Income Funds
Balanced Funds
The aim of balanced funds is to provide both growth and regular income.
Such schemes periodically distribute a part of their earning and invest
both in equities and fixed income securities in the proportion indicated in
their offer documents. In a rising stock market, the NAV of these
schemes may not normally keep pace, or fall equally when the market
falls. These are ideal for investors looking for a combination of income
and moderate growth.
Other Schemes
These schemes offer tax rebates to the investors under specific provisions
of the Indian Income Tax laws as the Government offers tax incentives
for investment in specified avenues. Investments made in Equity Linked
Savings Schemes (ELSS) and Pension Schemes are allowed as deduction
u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities
to investors to save capital gains u/s 54EA and 54EB by investing in
Mutual Funds.
Special Schemes
Index Schemes
Sectoral Schemes
Professional Management
Diversification
Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many
problems such as bad deliveries, delayed payments and follow up with
brokers and companies. Mutual Funds save your time and make investing
easy and convenient.
Return Potential
Low Costs
Liquidity
In open-end schemes, the investor gets the money back promptly at net
asset value related prices from the Mutual Fund. In closed-end schemes,
the units can be sold on a stock exchange at the prevailing market price or
the investor can avail of the facility of direct repurchase at NAV related
prices by the mutual fund.
Transparency
Flexibility
Affordability
Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a
lifetime.
Well Regulated
All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of
investors. The operations of Mutual Funds are regularly monitored by
SEBI.
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The flow chart below describes broadly the working of a mutual fund:
A mutual fund is set up in the form of a trust, which has sponsor, trustees,
Asset Management Company (AMC) and custodian. The trust is
established by a sponsor or more than one sponsor who is like promoter
of a company. The trustees of the mutual fund hold its property for the
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Sponsor
Based on the rules of the land a sponsor can also hold 100% stake in the
A.M.C for e.g. DSP Merrill Lynch Equity Funds is a mutual benefit trust
registered under the Indian trust act. The trustees have appointed DSP
Merrill Lynch Asset Management Company Pvt. Ltd. To manage the
funds in the trust.
The AMC receives a fee for its services. Currently SEBI permits a fee of
1.2% p.a. of the asset value of the fund for a fund less than 10 crores.
This AMC reports to the trustees who have to safeguard the interests of
the investors of the investors in the mutual funds
Trustees Company
The sponsor promotes the Trustee Company or the trust. The trustees
include experienced and eminent people representing a cross section of
the industry and the society. They not only monitor performance of the
AMC but also oversee operations of the custodian and transfer agent.
Custodian
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The A.M.C has to hire an outside custodian, which is responsible for the
custody of the assets of the fund. The custodian is also responsible for
receipt of all kinds of cash and non-cash benefits such as bonus,
dividends and rights. It is usually a bank or any other financially sound
institution
The AMC hires this agency for taking care of purchase and sale of the
units of the fund, issue certificates/account statements to investors, make
dividend payments etc. Eg.karvy consultants.
There was no uniform regulation of the mutual funds industry till a few
years ago. The UTI was regulated by a special Act of Parliament while
funds promoted by public sector banks were subject to RBI Guidelines of
July 1989. The Securities & Exchange Board of India (SEBI) was formed
in 1993 as a capital market regulator. One of its responsibilities was to
regulate the mutual fund industry and it came up with comprehensive
regulations for the industry in 1993. The rules for the formation,
administration and management of mutual funds in India were clearly
laid down. Regulations also prescribed disclosure requirements.
READING A PROSPECTUS
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When you request information on a mutual fund, they usually send you a
letter mentioning how great the fund is, the necessary forms you will
have to fill out to invest in the fund, and a prospectus. You can usually
just throw away the letter because it is often more of an advertisement
than anything else. But you should definitely read the prospectus because
it has all the information you need about the mutual fund.
OBJECTIVE STATEMENT
PERFORMANCE
The fund's performance usually helps you see how the fund might
perform but you should not use this to decide if you are going to invest in
it or not. Funds that do well one year don't always do well the next.
It's often wise to compare the fund's performance with that of the index.
If a fund consistently under performs the index by 5% or more, it may not
be a fund that you want to invest in for the long-term because that
difference can mean the difference of retiring with Rs.200, 000 and
retiring with Rs.1.5 million.
Usually in the performance section, there is a small part where they show
how a Rs.10, 000 investment would perform over time. This helps give
you an idea of how your money would do if you invested in it but this
number generally doesn't include taxes and inflation so your portfolio
would probably not return as much as the prospectus says.
Like most things in life, a mutual fund doesn't operate for free. It costs a
mutual fund family a lot of money to manage everyone's money so they
put in some little fees that the investors pay in order to make up for the
fund's expenses.
One fee that you will come across is a management fee, which all funds
charge. Mutual funds charge this fee so that the fund can be run. The
money collected from the shareholders from this fee is used to pay for the
expenses incurred from buying and selling large amounts of shares in
stocks. This fee usually ranges from about 0.5% up to over 2%.
Another fee that you're likely to encounter is a 12b-1 fee. The money
collected from charging this fee is usually used for marketing and
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One fee that is a little less common but still exists in many funds is a
deferred sales load. Frequent buying and selling of shares in a mutual
fund costs the mutual fund money so they created a deferred sales charge
to discourage this activity. This fee sometimes disappears after a certain
period and can range from 0.5% up to 5%.
When you are looking through a prospectus, be sure that you look over
these fees because even if a mutual fund performs well, high expenses
may limit its growth.
The following are the steps, which will guide you to invest in Mutual
Funds: -
Your financial goals will vary, based on your age, lifestyle, financial
independence, family commitments, and level of income and expenses
among many other factors. Therefore, the first step is to assess your
needs. You can begin by defining your investment objectives and needs,
which could be regular income, buying a home or finance a wedding or
educate your children or a combination of all these needs, the quantum of
risk you are willing to take and your cash flow requirements.
The important thing is to choose the right mutual fund scheme, which
suits your requirements. The offer document of the scheme tells you its
objectives and provides supplementary details like the track record of
other schemes managed by the same Fund Manager. Some factors to
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evaluate before choosing a particular Mutual Fund are the track record of
the performance of the fund over the last few years in relation to the
appropriate yardstick and similar funds in the same category. Other
factors could be the portfolio allocation, the dividend yield and the degree
of transparency as reflected in the frequency and quality of their
communications.
Investing in just one Mutual Fund scheme may not meet all your
investment needs. You may consider investing in a combination of
schemes to achieve your specific goals.
All you need to do now get the application forms of various mutual fund
schemes and start investing. You may reap the rewards in the years to
come. Mutual Funds are suitable for every kind of investor - whether
starting a career or retiring, conservative or risk taking, growth oriented
or income seeking.
Mutual Funds and securities investments are subject to market risks and
there can be no assurance or guarantee that the schemes of
the Schemes objectives will be achieved.
Credit Risk
Credit risk or default risk refers to the risk that an issuer of a fixed
income security may default (i.e., will be unable to make timely principle
and interest payments on the security). Because of this risk debentures are
sold at a yield spread above those offered on Treasury securities, which
are sovereign obligations and generally considered to be free of credit
risk. Normally, the value of a fixed income security will fluctuate
depending upon the actual changes in the perceived level of credit risk as
well as the actual event of default.
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Reinvestment Risk
This risk refers to the interest rate levels at which cash flows received
from the securities in the schemes or from maturities in the scheme are
reinvested. The additional income from reinvestment is the “interest on
interest” component. The risk is that the rate at which interim cash flows
can be reinvested will fall
The mutual fund at its sole discretion reserves the right to withdraw sale
and repurchase or switching of the units in the schemes. The unit holders
will have the option to switch all or part of their investment in the scheme
to any other scheme established by the mutual fund or with the same
scheme from one plan to another, which is available for investment at that
time, at the prevailing terms of the scheme to which the switch is taking
place.
Growth Option
The scheme will not declare any dividend under this option. The income
earned by the scheme will remain invested in the scheme and will be
reflected in the NAV. This option is suitable for investors who are not
looking for regular income. There will be no distribution of income and
return to investors will be only by way of capital gains.
Dividend option
Under the option the trustee may declare dividends. Such dividend shall
be declared monthly and unless the trustee determines otherwise the
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record date for the purpose shall be the 12th of the month concerned and
12th of the month is not a working day. The dividend shall not be paid out.
Any dividend declared shall be re-invested in the plan.
Dividend reinvestment
The investors opting for dividend option may choose to reinvest the
dividend to be received by them in additional units of the scheme. Under
this provision, the dividend due and payable to the unit holders will be
compulsorily and without any further act by the unit holder reinvested in
the scheme dividend to the unit holders and constructive receipt of the
same amount from each unit holder, for investment in units.
SIP is available for planned and regular investments under this plan unit
holders can benefit by investing specified rupee amounts periodically for
a continuous period. This concept is called rupee cost averaging. The
program allows unit holders to save month by purchasing additional units
of the scheme.
New investors can enroll for SIP facility on opening an account with an
initial minimum amount of Rs. 1,000/- However, for the cash Mug fund-
liquid option, the initial minimum amount for SIP facility is Rs. 10,000/-
and Mug Fund money at call option, the initial minimum amount for SIP
facility is Rs. 1,00,000/-.
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The unit holder con option for systematic withdrawal plan on monthly,
quarterly, semi-annual or annual bases to.
Once the unit holder enrolls for an SWP, the plan would continue
until.
The unit holder can select the repurchase date from a predetermined set of
dates. If no date is selected, the repurchased will be made on the 11th of
the month. If the selected date is not a business day, the repurchase will
take place on the next business day.
The unit holder can option for a SSP on a monthly, quarterly, semi-
annual or annual basis to switch a fixed number of units or amount in one
scheme to another scheme within the fund family or from one option to
another.
A switch instruction received from any joint owners in case the made of
holding is anyone or service is building on all joint owners. All switches
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Determination of NAV
The Net Asset Value of the Scheme(s) will be calculated on a daily basis
shown below:
The dividend paid on Units under the Dividend Plan and distribution tax
(if applicable, as per the prevalent tax provisions) on the amount of
Dividend distributed shall be deducted in computing the NAV of the
Units under the Dividend Plan each time Dividend is declared and till it is
distributed. Consequently once the Dividend is distributed under the
Dividend Plan, the NAV of the Units under the Dividend Plan will
always remain lower than the NAV of the Units under the Growth Plan.
The income earned / accrued and profits realized attributable to the Units
under the Growth Plan shall remain invested and shall be deemed to have
been invested in the Growth Plan to the exclusiveness of the Units under
the Dividend Plan, and would be reflected in the NAV of the Units under
the Growth Plan.
Net Asset Value shall be calculated as of the close of every Business
Day. Calculation of the Schemes’ Net Asset Value will be subject to such
rules or regulations that SEBI may issue from time to time and will be
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Example: -
Suppose IBDI mutual fund has introduced a scheme called balanced fund
scheme, the scheme size is 100 crores. The value of each unit isRs.10. It
has invested all the funds in shares & debentures & market value of
investment comes to Rs. 300 crores.
Recurring Expenses
Entry load
An AMC may decide that investor should pay more than NAV for their
investment in each unit of the scheme. These incremental amount paid by
new investor is called the ‘Entry load’ or ‘front end load’. Thus, if a
scheme has NAV of Rs 11 and entry load of 5%, the investor would pay
Rs 11.55 for each unit.
The entry load (Re. 0.55 in the above case) would be retained in a
separate account from which the AMC would meet part of its selling and
distribution expenses. Generally, debt schemes do not have an entry load.
Exit Load
An AMC may decide that sellers would recover less than NAV for the
units they sell in a scheme. This shortfall, borne by existing investors is
called the ‘exit load’ or ‘back end load’. Thus, if a scheme has NAV of
Rs. 11 and exit load of 5%, the investor would recover only Rs 10.45 for
each unit.
The exit load (Re 0.55 in this case) would go into a separate account from
which the AMC would meet part of its selling and distribution expenses.
Sec 2(42A): Under Section 2(42A) of the Act, a unit of a Mutual Fund is
treated as long-term capital asset if the same is held for more than 12
months.
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Sec 112: Under Sec 112 of the Act, capital gains chargeable on transfer
of long-term capital assets are subject to following rates of tax:
Resident Individual & HUF 20% plus surcharge.
Partnership Firms & Indian Companies 20% plus surcharge.
Foreign Companies 20% (no surcharge)
Under Section 115AB of the Income Tax Act, 1961, long term capital
gains in respect of units held for a period of more than 12 months will be
chargeable at the rate of 10%. Such gains will be calculated without
indexation of cost of acquisition. No surcharge is applicable for taxes
under section 115AB, in respect of corporate bodies.
Sec 115E: Under Sec 115E of the Act, capital gains chargeable on
transfer of long-term capital assets are subject to following rates of tax:
Non-Resident Indians 20% (No surcharge)
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The Finance Act 2001 has inserted sub - section (7) in section 94 with
effect from April 1, 2001 (i.e. FY 2001-02). According to this newly
inserted sub section, if any person buys or acquires units within a period
of 3 months prior to the record date fixed for declaration of dividend or
distribution of Income and sells or transfers the same within a period of
three months from such record date, then capital losses arising from such
sale to the extent of dividend or income received or receivable on such
units will be ignored for the purpose of computing his income tax.
Sec 2(42B): Under Section 2(42B) of the Act, a unit of a Mutual Fund is
treated as short-term capital asset if the same is held for less than 12
months.
Residents: As per section 194K and 196A of the Act, where any income
is credited or paid on or after June 1, 1999 by a Mutual Fund, no tax is
required to be deducted at source. (No TDS on dividend).
As per circular No. 728 dated October 30, 1995 issued by the CBDT, in
the case of a remittance to a country with which a Double Taxation
Avoidance Agreement (DTAA) is in force, the tax should be deducted at
the rate provided in the Finance Act of the relevant year or at the rate
provided in the DTAA which ever is more beneficial to the assesses. In
order for the unit holder to obtain the benefit of a lower rate available
under DTAA the Unit holder will be required to provide the Mutual Fund
with a certificate obtained from his Assessing Officer stating his
eligibility for the lower rate.
Wealth Tax
Sec 2 (ea): Units held under the Mutual Fund Schemes are not treated as
assets within the meaning of the Wealth Tax Act, 1957 and therefore, not
liable to Wealth Tax.
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Gift Tax
The Units of any value can be gifted without attracting any Gift Tax
payable either by the donor or the done, after October 1, 1998, by virtue
of repayment of Gift Tax Act, 1958.
Sec 115R: Under Section 115R, the Income distributed to a unit holder of
a Mutual Fund shall be charged to tax at a flat rate of 20% (plus
surcharge, if any) to be payable by the Mutual Fund. However, the above
distribution tax will be exempted for a period of three years, commencing
from Financial Year 1999-2000 i.e. April 1, 1999 for open-ended Equity
Oriented Funds (funds investing more than50% in equity or equity related
instruments).
be).
12.5% DISTRIBUTION TAX ON
NO DISTRIBUTION TAX ON CORPORATE DIVIDEND
DIVIDEND DECLARED OP
PAID. DISTRIBUTION TAX ON
MUTUAL FUNDS
10% TDS ON DIVIDEND IN Equity Schemes – Nil
EXCESS OF Rs. 2,500 Debt Schemes – 12.5%
NO TDS.
Until the pervious year, benefit at the rate of 20 per cent was available
even for investors having above Rs 150,000.
Investment in pension funds too is entitled to the tax rebate, within the
basic investment limit of Rs 70000. However, there is no sub-limit (like
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Section 80CCC too offers tax benefit for investment in pension funds.
The differences between the provisions of the two sections are:
The table below would clarify the investment limit upto which benefit of
section88 would be available with different combination of investment of
Rs 100000.
for Sec 88
Comment # ##
EQUITY FUNDS
PERFORMANCE RANKING
Performance Ranking
200
150 last 180
NAV
days
100
50 last 1 year
0
last 2 year
L
I
TA
FC
JM
IC
PA
IC
HD
TA
last 3 year
CI
IN
PR
Company
CONCLUSION:
From the above chart it is clear that last 3 years performance of the
HDFC is high and ICICI is low. And last 2 years performance of the
HDFC & ICICI is the most likely same and low is principal and in the
last 180 days the TATA’s performance is stable and principal
performance is also is stable in low ranking. So, in the current days
TATA mutual funds is the best performer then HDFC, ICICI & JM
mutual funds.
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7.1 INTRODUCTION
For findings the awareness of mutual fund I had done survey on it. For
that I choose a segment of L.I.C. Agents & Postal Agents segment given
by NJ Indiainvest. In Questionnaire there is a question related to different
investment avenue, parameter considered while convince their clients for
investing & their interest for knowing more about mutual fund & bits
schemes.
I had done survey of 100 L.I.C. & Postal Agents during my survey the
analysis of survey question wise & findings from it are as under.
From the survey I have found that out of 100 agents followings is the
suggestion that the agents give to his clients for invest their money.
Shares
Insurance(LIC)
Govt.Securities
Others
Findings:
From the above graph it is clear that most of the people invested in the
LIC, & Post Office Saving Schemes. It means people invest in those
investment avenue which are more safe. So, it clear that people does not
want to invest in any unknown & risky investment avenues.
From the survey I am found that out of 100 agents following is the
average parameters of his clients preference.
Findings:
From the above graph one can easily find that most of the people give
first rank to safety. Here 85% i.e. 85 agents out of 100 gave first
preference to parameters- safety. It means only 15% agents gave
importance first to other parameters while 45% agents gave second rank
to Tax-Efficiency. Only one agent out of 100 show liquidity first & also
one agent out of 100 show maturity & all other gives it less important
than other factors.
Pre.Investment
Post Investment
Doorstep Collection
Sharing Brokerage
Findings:
From the above chart it is clear that the most of agents would like
pre.investment services to their clients and than after post investment
services.
Option No Of People
YES 19
NO 81
YES
NO
Findings:
From the above chart it is clear that awareness among agents about
mutual fund as investment avenues is not quite well i.e. 19 agents out of
100 know about the scheme of mutual fund but they know only little bit
about it.
Option No Of People
YES 12
NO 88
YES
NO
NJ IndiaInvest
Findings:
The suggestion of mutual funds schemes by the agents is very less i.e.
12% means only 12 agents suggest mutual fund to its clients.
From the survey it is clear that out of 12 agents who are know
about mutual funds are suggest following schemes to their clients.
Findings:
Only 25 agents know about the schemes of mutual funds & most of them
are suggest about the Monthly Income Plan.
Q-7 Would you like to know more about the schemes of mutual funds?
Option No Of People
YES 22
NJ IndiaInvest
NO 78
YES
NO
Findings:
22 % Agents want to know more about scheme of mutual fund but 78%
are not interested in it. We can find from the above graph that now a days
people like to know about the new investment avenues.
7.3 CONCLUSION:
From all the above graph & findings from it one can finds that there a
need for increasing the awareness of different schemes of mutual funds &
benefits & risk associates with it& also provides data on different
schemes & safety under that investment as we find the above analysis
that most of the agents see safety first for investing in any avenues.
NJ IndiaInvest
Very few people know only about Mutual Funds & their different
schemes. So, there is a need for increasing awareness of mutual
fund & its schemes.
investment option & also give details on them from the safety,
returns & other points of view. So, people think on it & in future
they will also invest in such schemes.
company have to find out the reason for why people are not
Most of people who know about the mutual fund, but they don’t
have trust on AMC. Therefore, they have to take steps into gain
investor’s trust.
BIBILIOGRAPHY:
Website:
www.njindiainvest.com
www.navindia.com
www.mutualfundIndia.co
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