HDFC Mutual Fund has launched “HDFC FMP 1199D January 2017 (1)”, under its close-ended income scheme, HDFC Fixed Maturity Plans – Series 37.
The scheme’s objective is to make investments in debt market instruments and government securities that are maturing on or before the scheme’s maturity date to generate regular income.
The tenure of the scheme is 1199 days from the date of allotment of units. The face value of the new issue will be Rs. 10 per unit. The new issue will be open for subscription from 23 Jan. 2017 to 30 Jan. 2017.
| HDFC FMP 1199D January 2017 (1) | |
|---|---|
| NFO Open | 23 Jan. 2017 |
| NFO Close | 30 Jan 2017 |
| Allotment Date | 31 Jan 2017 |
| Date of Maturity | 23 May 2020 |
| Scheme Type | A Close ended Income Scheme |
| Minimum Application Amt | 5000 |
| Benchmark | CRISIL Short Term Bond Index |
| Offer Price | Rs. 10 |
| Investment Option | Growth & Dividend Payout |
Fund Suitability
The Scheme is suitable for investor
- Who want to lock in their investments at prevailing yields
- Investor looking for better post tax returns taking the benefits of indexation
- Whose investment horizon matches the tenure of plan
- Investor who want lower volatility in the returns
Tax Benefit
Investing in HDFC FMP 1199D January 2017 (1) shall enable the investors to avail the four indexation benefit on holding the investments till maturity. Indexation of cost of acquisition means raising the cost of investments till maturity. Indexation of cost of acquisition means raising the cost of investment depending on the Cost Inflation Index (CII) value in the financial year of purchase and sale of units, money lost due to the effect of inflation and then calculates the tax on the balance. Therefor, tax is calculated only on the gain after adjusting for inflation.
How does four Indexation benefit work
For the amount invested in Jan 2017 (FY 2016-17) and redeemed in May 2020 (FY 2020-21) hence the investor is eligible to take four indexation benefit across five financial years viz. FY 2016-17, FY 2017-18, FY 2018-19, FY 2019-20 and FY 2020-21.
| Term Deposit | Taxation on FMP | -- | (with indexation) | |||
|---|---|---|---|---|---|---|
| Deposit | Deposit | Deposit | FMP | FMP | FMP | |
| Amount | 100000 | 100000 | 100000 | 100000 | 100000 | 100000 |
| Rate of Interest % | 5% | 7% | 9% | 5% | 7% | 9% |
| Maturity Value -Gross | 117383 | 124889 | 132722 | 117383 | 124889 | 132722 |
| Indexation Cost | -- | -- | -- | 132042 | 132042 | 132042 |
| Capital Gain/Interest | 17383 | 24889 | 32722 | -14659 | -7153 | 680 |
| Tax Rate | 30.90% | 30.90% | 30.90% | 23.07% | 23.07% | 23.07% |
| Taxable Income | 17383 | 24889 | 32722 | -- | -- | 680 |
| Tax Liability | 5371 | 7691 | 10111 | -- | -- | 157 |
| Post Tax Value of Maturity | 112012 | 117198 | 122611 | 117383 | 124889 | 132565 |
| Post Tax Gain | 12012 | 17198 | 22611 | 17383 | 24889 | 32565 |
| Post Tax Gain (CAGR) | 3.51% | 4.95% | 6.40% | 5.00% | 7.00% | 8.96% |
- ## In case the investment is made in the FY 2012-13 and redeemed in the FY 2016-17, the investor gets indexation benefits across 4 financial year. CII is 1125 – FY 2016-17 , 1081 – FY 2015-16, 939 – FY 2015-14, 852 – FY 2014-13
- The Tax Rate assumed is the highest rate based on current tax slabs
- Taxable income is zero as the indexed cost of acquisition is greater than the maturity value
Call your Mutual Fund adviser, agent, broker for Investment
Rajendra – 8007750904
