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I transferred my investments from the dividend option to the growth option. Please tell me which date will be used for capital gain purposes - the original date of investing in the dividend plan or the new date of transferring investments to the growth plan? Also, if there are two holders of a fund, then will the second holder automatically become the primary holder of the fund on the demise of the first holder without any liability? Or is there any procedure for that?
- Ramesh
To answer your first question, switching from the dividend plan to the growth one is considered as a transaction. This conversion is considered as a sale transaction from the date of your original investment to the time you switched to the growth plan. Now when you invest in the growth plan, it will be considered as a new investment and this new date will be taken into consideration when you redeem it. To summarise, switching from the dividend to growth plan would involve a redemption from the existing scheme and a fresh purchase in the desired plan.
Regarding the second question, yes, you will be liable to inform the fund house about the demise of the first holder and then, the transmission of investment rights is effortlessly made to the second holder.
This article was originally published on December 02, 2019.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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