WEEKLY WEALTH REPORT
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How to Withdraw from Mutual Funds and Pay Zero Tax?
Are you Retired? You May Be Paying 12.5% LTCG Tax Unnecessarily.
If you redeem as SWP from ₹1 crore corpus from mutual funds today, longterm capital gains (LTCG) tax can take away a significant portion of your wealth. Typically the first 1.25 Lakhs profit is exempt from tax and then the taxation is 12.5%.
Most retirees and investors automatically choose SWP (Systematic Withdrawal Plan) for monthly income. But very few realise that every SWP withdrawal can trigger capital gains taxation.
What if there’s a legally valid way to structure mutual fund withdrawals with potentially zero tax in certain situations?
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IDCW: A Different Approach
IDCW (Income Distribution cum Capital Withdrawal) works differently from SWP.
Instead of redeeming units every month, the mutual fund distributes payouts from the scheme itself.
And importantly:
• IDCW payouts are generally treated as income in your hands
• Not as capital gains from redemption
This changes the tax treatment completely.
Under the new tax regime, if your total taxable income remains within the rebate threshold under Section 87A, your effective tax liability could become nil upto 12 lakhs.
That means:
Pensioners \ Homemakers \ Retirees \ Individuals on career breaks may potentially receive mutual fund cash flows with very low or even zero effective tax.
You are receiving your own money back in a structured form.
That’s why IDCW should never be selected purely for “monthly income excitement.”
It must be used strategically
WEEKLY MARKET PULSE
After a prolonged weak sentiment, last week Indian Stock Market closed positive with the signs of progress as the US – Iran war talks to end nearly 3 Months War. Sensex rose to 0.2% this week to 75,415.
IT Stocks were the biggest beneficiary with 4.3% Rise after a steep sell off last week over AI Fears.
Telecom and FMCG were the worst sectors for the week.
Infosys, Trent and Tech Mahindra were biggest gainers.
Gross FDI ( Foreign Direct Investment ) rise 17% to record $95Bn for Fy 25 – 26. It is the fastest pace in last 6 years, after falling for 4 continuous years.This high FDI shows India is Stable and Attractive for Business.
RBI Steps up Dollar Sales to $53Bn to defend INR and Rupee gains in two successive sessions and returns to 95 Levels
Economic Activity in April exhibited resilience in both Industrial and Service Sector with strong numbers.
Meta begins layoffs of 8,000 employees amid AI restructuring
PRODUCT OF THE WEEK
EDELWEISS MID CAP FUND
This midcap focused fund that primarily invests 80% in midcap companies with strong business fundamentals promising good earnings and growth opportunities
1. Consistent Long-Term Alpha Generation: The fund has demonstrated an ability to outperform its benchmark (Nifty Midcap 150 TRI) and peers over 3, 5, and 10-year periods, often delivering higher compounding returns compared to the category average.
2. Excellent Risk-Adjusted Returns: Evaluated by metrics like Sharpe and Sortino ratios, the fund has shown that it rewards investors well for the risk taken, with better downside protection than the category average in falling markets.
3. High-Conviction Stock Picking: The fund focuses on a portfolio of around 75–85 stocks, allowing for high conviction. It holds select businesses for the long term (5+ years), such as Trent or Dixon Technologies, allowing compound growth to work.
THIS WEEK MY TOP SOCIAL MEDIA CONTENTS
ARE YOU BUILDING WEALTH OR JUST BUYING MUTUAL FUNDS?
Last week, I spoke with a young couple—Ramesh (30) and Vidhya (27).
Both work in IT. Both invest ₹25,000 every month. On paper, everything looked perfect.
But they had one problem:
They were investing separately, not planning together.
Different funds, Different decisions, No shared roadmap.
Now they have:
A 5-month-old baby
AI-driven job uncertainty
₹50,000/month in SIPs
Their questions were simple:
• What if one of us loses our job?
• Is our child's future secure?
• Are we investing with purpose?
So we stopped talking about mutual funds.
And started talking about goals.
Emergency Fund
Child's Education
Retirement
Financial Freedom
Every SIP got a purpose. Every investment got a destination.
The amount they invested didn't change. Their confidence did.
Because financial planning for couples isn't about two people investing under one roof.
It's about building one system that protects and grows the family's future.
Wealth is not built by investments alone. It's built by alignment.
ALL YOU WANT TO LEARN ABOUT
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STOCK MARKET
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2. Master The Art Of Sip’s
3. Build Wealth Like A Pro
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Key Highlights:
1. Key Entry And Exit Points Of The Stock Market
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This Newsletter Is From Creating Wealth Company – For Private Circulation Only.
For More Information Connect With Sathish Kumar @ 9841058689.
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DISCLAIMER
Mutual Funds and Stock Market Investments are subject to market risks, pls read all scheme related documents carefully. Past performance of the mutual fund is not necessarily indicative for future performances. Mutual fund does not guarantee any returns or dividends.
This report is for informational purpose only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, we shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means are prohibited.