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what are the difference between mutual funds and pension funds
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what are the difference between mutual funds and pension funds Related...
Mutual funds withdrawals through SWPs are considered redemptions. The gains are treated as short-term capital gains and taxed at the applicable slab rates for the first three years and as long-term capital gains thereafter and taxed at 10% without indexation and at 20% with indexation. Your pension, however, will be treated as income and taxed at the applicable slab rate. The effective tax payable on capital gains (short and long term) tends to be lower than the tax payable on annuity or salary income.

Based on current income tax laws, income slabs and tax rates, an SWP in accrual debt mutual funds is likely to give you better after-tax cash flows, compared to a pension plan. So, the mutual fund route seems better than a pension plan.

Here is a brief note on pension plans and mutual funds to help you make an informed decision basis what suits you and your personal needs.
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what are the difference between mutual funds and pension funds Related: Meaning - Mutual funds, Indian Financial system
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