Arika Gupta, SVKM’s NMIMS Kirit P. Mehta School of Law, Mumbai
Abstract
There has been a significant increase in Mutual Fund investment over the past years. These investment options give investors the ability to make investments in different financial instruments with the use of the skills and experience of qualified investment managers. The biggest advantage of such investment instruments is that when compared with other conventional forms of investment, such as FDs, Mutual Funds yield higher returns. The way a Mutual Fund raises profits for the investors is by collecting the raised capital from all the investors, and as per the advice of the investment managers, investing the sum in a portfolio that is balanced which contains either debt securities or equity instruments or both. While investing in Mutual Funds yields higher profits than traditional investment methods, Mutual Funds are also beneficial as some of them help in reducing the tax liability of the investor in a legitimate manner. Some investments such as PPF, NPS, Equity Oriented Mutual Funds, etc. have special sections dedicated to them under deductions, acting as benefits to the tax payers. This research paper deals comprehensively about Mutual Funds, their types, forms of income, tax implications, etc. The paper also does a study of some investment options that function similarly to Mutual Funds and compares tax benefits of two other investment options with those of Mutual Funds.
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