1. I would like to know if co-operative housing societies are permitted to invest in mutual funds. Under which rule? 2. What categories of funds can such entities invest in? 3. What documents do they need to submit? 4. Are the redemption rules same as for individuals? 5. Is the tax applicability same as for individuals?
1. Section 70 of the Maharashtra Cooperative Societies Act provides one of the option to invest or deposit its funds in any of the securities specified in section 20 of the Indian Trusts Act, 1882. Vide Notification dated 21st April 2017 the government specified the Mutual Fund to be one of the specified securities under section 20 of the Indian Trust Act. Attached is the notification for ready reference.
2. Units of debt mutual funds regulated by the Securities and Exchange Board of India established by section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Units of mutual funds regulated by the Securities and Exchange Board of India, which have minimum sixty-five per cent of their investment in shares of body corporates listed on a recognize stock exchanges. Exchange traded funds or index funds regulated by the Securities and Exchange Board of India which replicate the portfolio of the Bombay Stock Exchange Sensex Index or the National Stock. Exchange Nifty Index or those constructed specifically for disinvestment of shareholding of the Government of India in a body corporate.
3. The following documents are required at the time of application:
1) Resolution/ Authorization to invest
2) List of authorized signatories with specimen signatures
3) Declaration of Ultimate Beneficial Ownership
5) Copy of PAN Card
6) KYC Compliance
7) Trigger Form (if applied)
8) Declaration under FATCA
4. The redemption process for corporate housing societies is partly the same as individuals’. To elucidate on the above, if the redemption request is sent via an email, we would require a scanned image of transaction slip from their registered email ID. However if the redemption request is via an offline mode, the process and rules that are applied is the same as the individuals’; hard copy of the transaction slip for redemption.
5. As regards tax, please see refer to the table below -
Less than One Year
1 to 3 Years
More than 3 Years
Types of Funds
10% tax if gains>Rs. 1 Lakh
10% tax applicable if gains are more than 1 Lakh
Taxed as per Income Tax Slab applicable to Society
Taxed as per Income Tax Slab
20% with indexation benefits
Plus applicable surcharge and cess.
Hope your queries have been answered satisfactorily.
Risk Factors: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Please visit - www.QuantumMF.com to read Scheme Specific Risk Factors.
Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the scheme's objective will be
achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investment in mutual fund units involves
investment risks such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the Sponsor / AMC/ Mutual
Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act,
1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager:
Quantum Asset Management Company Private Limited (AMC). The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.