Here's how Kotak Balanced Advantage Fund can be tax efficient for you!

6 Apr 2022

Investing for the future, planning your taxes, building an emergency corpus, and getting relevant insurance are some of the components of effectively planning one’s finances.

What if you can combine some of these functions with a single instrument?

For instance, the Kotak Balanced Advantage Fund. This fund invests across equities and debt, and uses dynamic asset allocation as a strategy, tactically moving between these based on market conditions.

What this means is that this fund does the task of asset allocation, depending on the various market conditions, which would have to otherwise be done by investors, making it automatic for you. And because it is done at the fund level, it may turn out to be more tax-efficient for investors.

Let’s understand this better.

When investors manually move their money between equity and debt, they could be subjected to taxes on the capital gains made in the short term.

However, Balanced Advantage Funds are structured in a manner where when the fund moves between two asset classes as a part of its routine rebalancing, it is not liable for taxes. Only when an investor is selling, the final sales proceeds are taxable, in the hands of the investors.

Furthermore, even after the rebalancing, the tax treatment of the fund continues to remain equity-oriented, which is ultimately beneficial for investors, as equity funds pay a lower tax rate as compared to debt-oriented funds.

With Kotak Balanced Advantage Fund, not only is your asset allocation made automatic, but it could also be more tax-effective than what may be done at an individual level.

Experience the tax benefits with Kotak Balanced Advantage Fund. Start an SIP Today!

 

 

 

 

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© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.