Tax Benefits of Investing in Templeton Mutual Funds

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Introduction.

The Templeton India Equity Income Fund is a fund under the Franklin Focused Equity Fund umbrella that was created in 2006. This fund invests in several companies in India as well as companies in upcoming markets that have potential or seem to have the potential for appreciation of their capital. They invest in funds that seem to be such that they will provide regular income or returns via dividends.  

This fund has consistently performed well. It has declared a dividend consistently for the past 12 years. As of 2022, this fund is valued at INR 1229.92,00,00,000s and has had a growth of 82.5760%. 

tax benefits of investing in mutual funds

The objective of this fund, according to Franklin Focused Equity Fund, is to be able to give a combination of consistent and regular income to its investors, as well as the possibility of long-term appreciation of capital. They do this by mostly investing in stocks that have shown that they have the potential to provide good dividends or have currently been giving good dividends; they identify these companies by utilising a value strategy. Currently, the Templeton India Equity Income Fund growth has been benchmarked against the nifty dividend opportunities 50 total return index. 

Tax Benefits of Investing in Templeton India Equity Income Fund.

1. The first tax benefit that you’ll get if you invest in this Franklin Focused Equity Fund is that for long-term capital gains, i.e., LTCG, the tax will apply at 10% (with possible surcharge) without indexation if you have had the units in your possession for more than the period of one year that is 12 months.

2. The second tax benefit as you will get short-term capital gains tax at 15% (with possible surcharge) if you have had the units in position for a period of less than a year, which is less than 12 months.

3. The third tax benefit that you will get if you invest in the Templeton India Equity Income Fund is that income distribution cum capital withdrawal will be taxed in your hand, i.e. it shall be taxable in the hands of the investors, and there will be a TDS deduction for mutual funds at the rate of 10% for resident investors and at the rate of 20% for investors were non-residents (with possible surcharge) prior to any reinvestments or any payouts. In addition to this, investors are also given a choice to claim a tax credit for the TDS that is deducted during their annual return filing.

4. When it comes to dividend distribution tax, the dividend income of an investor will be counted as a part of their income, and they shall be taxed on it according to their specific tax slab.

5. For any dividend income that is accrued, which is in excess of INR 5000 in a specific financial year, the Franklin Focused Equity Fund house charges a TDS of 10%.

Who should invest in the Templeton India Equity Income fund and for how long?

The Templeton India Equity Income Fund is ideal for people who are investing for the purposes of either creating a retirement fund, creating an education fund for the future or are interested in long-term wealth creation. This fund under the Franklin Focused Equity Fund umbrella is a great alternative to investing in a dividend-paying company. The ideal time period to invest in this fund and hold your investments is for a period of five years and more. That is because this is a high-risk fund.

Is the Templeton India Equity Income fund for you?

This fund provided by the Franklin Focused Equity fund umbrella is perfect for you if

  1. If you are looking to invest in something where there will be long-term capital appreciation or wealth creation
  2. If you are looking for a fund that targets market stocks from emerging markets and Indian markets that have the potential to give you great dividends

Some examples of companies that the Templeton India Equity Income fund has invested in.

  • They have invested in Infosys Limited, a leading company in the software and services sector.
  • They have invested in HUL or Hindustan Unilever Ltd, which has been a leading company for many decades in the field of household and personal products.
  • They have invested in the Tata Power Co. Limited company, one of the biggest companies in India and a leader in the field of utilities.
  • In the last few years, they have invested in Bajaj Auto Ltd, a market leader in the field of automobiles and components.
  • The Templeton India Equity Fund has invested in ITC, one of the oldest companies when it comes to food, beverage and tobacco.

This list should give you an idea of the kind of companies that Templeton India Equity Fund, under the Franklin Focused Equity Fund umbrella, has been investing in. The only common thread amongst all the companies is that they are well-established companies; hence there is a low risk of loss.

Source.

https://www.franklintempletonindia.com/investor/fund-details/fund-overview/templeton-india-equity-income-fund-4487 

https://m.economictimes.com/templeton-india-equity-income-fund/mffactsheet/schemeid-3280.cms

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