I do not understand how website of this repute allows so many errors that too on a financial subject where anything less than 100% accuracy is not acceptable.
With one reading itself i found few major errors here..
Dividend Distribution tax on Debt fund has been increased only in case of liquid/money market funds and not on all the debt funds.
The long term capital gain on Debt Mutual fund applies only after one year of holding and not on three years of holdings.
The schemes selected here are those schemes which are meant only for 1 day to 3 months investments and no way it should be bought or sold for more than six months. There are variour other types of debt funds available which has potential to give far better returns in one year than the schemes selected.
The dividend amount has been mentioned as Rupee and nowhere it has been mentioned what is the NAV of the scheme. This is a clear violation of SEBI law. Without NAV the dividend amount is of no use at all..The templeton Short term plan quarterly dividend NAV is Rs.1021/- Now the dividend per unit of Rs.13.15 has the relevance. The way the dividend figures are presented here clearly misleds the investors.
The dividend distribution tax on Rs. 90000/- based on 28.325% dividend distribution tax comes out to be only Rs.19866 and not Rs.25,493 as mentioned here. The author have not seen the rules clearly that the dividend distribution tax applies on the amount the investor receives in his hand and not on the amount the Mutual Fund reduces from the NAV/Scheme. In the above case Investor receives Rs. 70,134/- in his hand and a 28.325% on the amout Rs.70,134/- comes to be Rs. 19,866/- (90,000-19,866). This fact is not even known to most of financial advisors. One can talk to the operation team on any fund house and they will confirm this.
Yes I do agree with the author that some of Debt Funds are better than Bank FDs, but it is for all the investors and not only for high tax bracket investors. These schemes are the Fixed maturity plans which are offering more than 10% returns in one year vis a vis Bank FDs who are offering 7.50% to 8.00% returns in one year.
