Income Solution

Income solutions comprise of debt-oriented hybrid funds. These are funds which invest in a mix of equity and debt instruments, with a larger proportion towards debt funds. This is towards the objective of the fund to earn regular income for its investors along with a proportion of capital growth.

These funds are ideal for you if you are looking for alternative investment means to earn regular periodic income along with a potential for capital appreciation, at a moderate risk level.

Conservative hybrid funds have a dual objective of earning regular income as well earing capital growth. It is this wealth creation potential that can help you earn extra as an investor to potentially beat inflation over time.

Conservative Hybrid funds are suitable for investing over the medium to long term – in excess of 3 years. These funds can be invested in over the long term if you are looking for regular returns but have relatively low risk appetite.

These funds have a lower risk level than equity funds, yet a higher risk level than pure debt funds due to the proportion invested in equity funds.

Even though these funds invest a larger proportion in debt funds and carry a lower risk level than equity-oriented funds, however they cannot guarantee periodic returns. The ability of the fund to distribute periodic returns is dependant on its available distributable surplus. This is subject to interest rate and credit risk.

The taxation of these funds on redemption are akin to the taxation of debt funds. Funds held for 36 months or more are taxed as long-term capital gains – at 20% tax rate after indexation. Funds held for period shorter than this are taxed as short-term capital gains, added to your income and taxed at slab rates