Sundaram Value Fund Series VII - Regular Plan

Suitability:

When you invest for seven years or more, you can expect gains that comfortably beat the inflation rate as well as returns from fixed income options.

This is a fund that invests in smaller companies. Compared to those that invest in larger companies, such funds tend to fall more when stock prices fall. So while you can expect higher returns in the long term, there will be more severe ups and downs along the way.

Like for all equity funds, you must invest only through the SIP route. Click here to read a primer on SIP investing.

Warning: Do not invest in this, or any other small-cap fund, if you need to redeem your investment in less than seven years.

Taxability of earnings:

Capital gains

• If the mutual fund units are sold after 1 year from the date of investment, gains upto Rs 1 lakh in a financial year are exempt from tax. Gains over Rs 1 lakh are taxed at the rate of 10%.
• If the mutual fund units are sold within 1 year from the date of investment, entire amount of gain is taxed at the rate of 15%.
• No tax is to be paid as long as you continue to hold the units.

Dividends

• 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.