I have an MF account with a bank and I’d like to transfer all my equity mutual funds from 10 different fund houses to my wife. What is the process and what are the tax implications of this?
-Deepak Tripathi
There are two ways of going about with this. If all your investments are in equity funds and have been held for over one year, then you can redeem these investments and invest the money all over again in your wife’s name. There will be no tax implication here. If the investments are less than 1 year old, then they will have tax implications because gains on investments held for less than 1 year are subject to 15 per cent short-term capital gains tax.
That apart, the same goal of being able to add your wife as the beneficiary can be achieved without actually transferring these investments in her name. It is possible for an existing investment to have a co-owner and you can get your wife’s name added as a joint holder to the investments that you’ve already made. This will have no tax implication whatsoever.
This article was originally published on June 20, 2012.
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