How to Invest in MIP? Is MIP Income Taxable?
I am at my retirement age and I am looking for Monthly Income Plans (MIPs) Mutual Funds with low risk. Is there any MIP Mutual Funds available currently. If yes, then let me know the MIP Mutual Funds to Invest in India and its procedure as well. Also I would like to understand if MIP Income is taxable?
Monthly Income Plans (MIP) is defined as a type of mutual funds where the fund invest 70-80% in debt instruments and remaining 20-30% in equities. Monthly Income Plans (MIP) are categories under hybrid mutual fund which are designed for pensioners. However, unlike the name, this MIP Mutual Funds are not something that delivers a fixed monthly income.
MIPs generate more than 100% returns when compared with other debt funds, this is because of investing some portion in equities as well. Historical data indicates that best MIP Mutual funds in India can delivered 10-12% returns annually, which is obviously more than the traditional fixed deposits or public provident funds.
Yes, MIP Income is taxable. Since this is also a type of debt-oriented fund, all rules of long-term capital gains (LTCG) and short-term capital gains (STCG) taxation are apply to MIPs too. Basically MIP Income is taxable in the same manner as your debt fund income.