Manmohan Joshi , is an MBA person and a great motivation guru, having more than 6 years experience in finance sector. Presently working as a CEO With kautilya Group of education.

1. Mutual Funds An Introduction By MAN MOHAN JOSHI

5. Mutual Fund Set Up

52. Tax Aspects in Mutual Funds

56. Short Term Capital Gains 48% no surcharge Foreign Companies 30% plus surcharge Non Resident Indians 35% plus surcharge Indian Companies 35% plus surcharge Partnership Firms 30% plus surcharge as applicable Resident Individuals Rate Category

60. Tax and TDS Rate Gain will be added to the total income of the investor and taxed at the marginal tae of Tax. No TDS NRI: 30% TDS from Gain a)20% with Indexation b) 10 % without , NO TDS NRI’s:20% TDS from Gain Difference of the Sale Price and The Purchase Cost/The Indexed Purchase Cost* No.Units The Capital Gain or Loss is the difference of the Sale Price and the Purchase Cost. Capital Gain/ Loss Applicable N.A Indexation Benefits Long Term Capital Gain Short Term Capital Gain Capital Gain

61. Assumptions : 1. Purchase Cost (as on 01-01-2002): Rs.20 per Unit 2. Sale Price (as on 22-09-2003): Rs.22 per unit 3. Indexation component (463 /447) = 1.0358 (where 463 is the cost inflation index for the year 2003-04 and 447 was the cost inflation index for the year 2002-03) 4. Indexed Cost of Purchase = (1.0358*20) = 20.716 Description Formula Calculation Tax liability with Indexation LTC Gain = Sale Price - Indexed cost of purchase LTC Gain = Rs.22 - Rs.20.716 = Rs.1.284 (excluding surcharge) LTC Gain Tax = LTC Gain * 20% LTC Gain Tax = Rs.1.284 * 20% = Rs.0.2568 Tax liability without Indexation LTC Gain = Sale Price - Purchase Cost LTC Gain = Rs.22 - Rs.20 = Rs.2 (excluding surcharge) LTC Gain Tax = LTC Gain * 10% LTC Gain Tax = Rs.2 * 10% = Rs.0.20 In the above example, since the tax liability “without Indexation” is lower, an investor will have to pay Rs.0.20 as the Long Term Capital Gain Tax.

62. Indexation Since the tax rate in case of ‘without Indexation’ is exactly half that of ‘with Indexation’, we can conclude the following: 1. When Growth in NAV is more than double of Indexation Component, an Investor needs to pay Tax applicable ‘without Indexation’. 2. When Growth in NAV is exactly double of Indexation Component, an Investor will be indifferent for either option, since both ‘with and without Indexation’ will yield the same tax liability. 3. When Growth in NAV is less than double of Indexation Component, an Investor needs to pay Tax applicable ‘with Indexation’ option.

63. Matrix for the Set-Off of various Capital Gains v/s various Capital Losses STC Loss V/s LTC Gain Permitted STC Loss V/s STC Gain Permitted LTC Loss V/s LTC Gain Permitted LTC Loss V/s STC Gain Not Permitted

67. N et assets Equity schemes Debt schemes First Rs. 100 crore 2.50% 2.25% Next Rs. 300 crore Next Rs. 300 crore On the balance of assets 2.25% 2.00% 2.00% 1.75% 1.75% 1.50%

69. Investment Strategies

70. Conservative Portfolio

72. Moderate Portfolio

74. Aggressive Portfolio

75. Bogle's Strategic asset allocation

78. Thank You All