Sundaram Banking & PSU Debt Fund - Regular Plan

Suitability

"Banking and PSU funds invest mainly in bonds issued by banks, public sector undertakings (PSUs) and public financial institutions. They are suitable for a short investment horizon of two to three years, or for the fixed-income allocation in your longer-term portfolio. You can expect to earn higher returns than what a bank fixed deposit can fetch.

The risk of incurring a loss in these funds is low, but they do not guarantee returns or safety of capital like a bank deposit.

Remember, their returns may not be substantially higher than inflation. They are meant to deliver steady, but low to moderate returns and are not suitable to build wealth in the long run."

Taxation

Capital Gains Taxation

• If investment is made on or after 1 April 2023: Entire amount of gain is added to the investors' income and taxed according to the applicable slab rate.
• If investment is made before 1 April 2023:
  
• Sold within 3 years from the date of investment: Gains are added to the investors' income and taxed according to the applicable slab rate.
• Sold after 3 years from the date of investment: Gains are taxed at the rate of 20% after providing the benefit of inflation indexation.
• No tax is to be paid as long as you continue to hold the units.

Dividend Taxation

• Dividends are added to the income of the investors and taxed according to their respective tax slabs. Further, if an investor's dividend income exceeds Rs 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.