Thread by @vaid_varun

All categories of #mutualfunds (including ETFs) would be covered under #stampduty charges for units issued in demat & non-demat form. It will cover equity, derivatives & currency trades. Stamp Duty = Direct Tax levied by the govt. u/s 3 of Indian Stamp Act, 1899. @AmarUjalaNews

#StampDuty charges:

Equity (delivery) - 0.015% or ₹1,500 per crs on buy-side

#Equity (intra-day) - 0.003% or ₹300 per crs

#Futures (equity & #commodity) - 0.002% or ₹200 per crs

#Options (equity & commodity) - 0.003% or ₹300 per crs

#Currency - 0.001% or ₹10 per crs

- The #stampduty will also be applicable on #AlternativeInvestmentFunds (AIFs)

- Impact is more on the short term #investments by the #investors

- No stamp duty on #redemption of #mutualfund units.

- Impact at #portfolio level too i.e when fund manager executes transaction.

For #investors of liquid #fund and/or overnight #funds in general have a short holding period. Can be used for #ContingencyPlanning, to address short-term #goals & to tactically shift #money to #equity funds over a period of time. Churning in these funds by investors is higher.

- When #investors frequently trade in #mutualfunds, they will now have to factor in the impact of #stampduty on the returns. Note: Cost impact on returns will reduce with an increase in tenure.

- Impact of stamp duty will be higher on #mutualfunds with high turnover ratio.

If #mutualfund has a high churn ratio, #investors are likely to shell out more #money by way of higher TER, if #mutualfund house is not willing to bear that #cost. It depends upon fund house what they opt for. Viable option for #AMCs can be to bear SD instead of reducing #TER.

An infographic pertaining to impact analysis. @CNBCTV18Live @CNBC_Awaaz @NDTVProfit @OutlookMoney @bsindia @livemint @ETNOWlive @ETPrime_com @deepakshenoy @AmitMTrivedi @IamMisterBond @in_morningstar @cafemutual @wealthforum_tv @AmarUjalaNews @DainikBhaskar @thetribunechd @FT