for investing more than R50,000 in a foreign mutual fund?
Yes, those investing in any category of mutual funds, including foreign mutual funds, have to furnish PAN details irrespective of the size of their investment. Sebi has made it mandatory to furnish PAN for all stock market transactions as part of its efforts to check fraudulent
How are long-term capital gains from debt funds calculated (with and without indexation) and how does one pay tax on them?
The long-term capital gains on debt funds held for more than a year are liable to be taxed. Long-term gains from debt funds are subject to either 10% flat tax or 20% with indexation (plus applicable surcharge and cess).
You can choose any method that is beneficial for you.
As far as the process of paying the tax is concerned, an individual needs to pay by self as and when the capital gains tax is realised.
How transparent are the NAVs that fund houses quote? Is there a way to verify the accuracy of these figures? Also, who is in charge of monitoring the returns declared by fund houses?
Mutual fund houses quote NAV prices on a daily basis, which helps investors know the true worth of their MF investments. The calculation of NAVs is not very transparent as portfolio disclosures do not happen on a daily basis. However, this is not a cause of worry as capital markets regulator, Sebi, has laid out stringent norms and careful practices to ensure no malpractices take place.
Besides, AMCs appoint fund accounting companies to verify and monitor the returns declared by fund houses. Fund accounting service helps asset management firms to reduce errors in NAV calculation and manage overall fund accounting.
The writer is senior investment analyst, Morningstar Investment Management, India