Will switch from regular plan to direct treated as sale of units

I am invested in DHFL Pramerica - Low Duration Fund - Daily Dividend for a little over an year. It was a lumpsum investment done via a distributor. Here are my questions: * Last year I had some cash earmarked for a purchase which did not materialize, hence I parked/invested my money in this fund for quick access. Since I have postponed my purchase plans for another 1 year, is it advisable to remain invested in this fund for that duration or do I have other options in the same category? * Their support team mentioned that there is no exit load on this investment however, I wanted to know if I go ahead with the "Switch" option (Direct - Growth), is it better than the current option (Daily Dividend)? * Is there any tax liability on me if I go ahead with the Switch option, considering the switch option may/will consider it as a fresh investment and thereby any angle of short term gain (as it is just an year old investment)?

Apr 13, 2017 by Mohit, Bangalore  |   Mutual Fund

Growth plan will be better if you are falling in lower tax bracket (i.e. less than 30%). For higher tax bracket dividend pay out option can be beneficial.

If your investment horizon is one year then you can consider switching to their short term fund. DHFL Pramerica - Low Duration Fund is a ultra short term fund.

Switching from regular plan to direct plan will be considered as sale of units and taxed accordingly.

Thanks for writing to Advisorkhoj.

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