A Mutual Fund is a professionally managed investment vehicle that pools money from many investors to purchase a diversified portfolio of securities like stocks, bonds, or other assets. Each investor owns units, which represent a portion of the fund's holdings.

NAV represents the per-unit market value of the mutual fund scheme's assets. It's calculated daily by subtracting the fund's liabilities from its total asset value and dividing by the total number of outstanding units. When you buy or sell units, the transaction usually happens at the day's closing NAV.

Growth Option: Profits made by the fund are reinvested back into the scheme, leading to appreciation in the NAV over time. This is suitable for long-term wealth creation.

IDCW (Income Distribution cum Capital Withdrawal) Option: Profits earned by the fund may be distributed periodically to investors as IDCW (previously called Dividend). The NAV falls to the extent of the IDCW paid out. This is suitable for investors seeking regular income, though IDCW is not guaranteed and is paid out of the scheme's distributable surplus.

Open-ended Funds: These funds are available for subscription and redemption on an ongoing basis directly from the fund house (AMC) at the prevailing NAV. They offer high liquidity.

Close-ended Funds: These funds have a fixed maturity period and are open for subscription only during the New Fund Offer (NFO). After the NFO, units can typically be bought or sold only on stock exchanges where they are listed, and liquidity might be lower than open-ended funds.

Mutual Funds in India are managed by Asset Management Companies (AMCs), also known as fund houses. AMCs employ professional Fund Managers who make investment decisions based on the scheme's objectives. The entire structure is overseen by Trustees (who protect investor interests) and regulated by SEBI (Securities and Exchange Board of India).

SEBI (Securities and Exchange Board of India) is the primary regulator for the securities market, including Mutual Funds. Its role is to protect investor interests, promote the development of the securities market, and regulate market participants like AMCs, Trustees, and distributors through various guidelines and regulations.

You can invest through various channels:

• Directly with the AMC: Via their website or physical branches (Direct Plan).
• Through a Mutual Fund Distributor/Advisor (like Nidhi Capital): They assist with selection, paperwork, and ongoing support (Regular Plan).
• Online Platforms/Apps: Several platforms aggregate schemes from multiple AMCs (offering both Direct and Regular plans). Nidhi Capital provides access via TheMFBox platform.
• Stock Brokers: If the units are listed (like ETFs or some close-ended funds).

KYC stands for "Know Your Customer". It is a mandatory process mandated by SEBI to verify the identity and address of investors before they can invest in mutual funds. This helps prevent money laundering and ensures regulatory compliance. You typically need to submit documents like PAN card, Address Proof, and sometimes undergo In-Person Verification (IPV) or Video KYC.

Generally, a Demat account is not mandatory for investing in most open-ended mutual fund schemes bought directly or through distributors/platforms. Units are held in a 'Statement of Account' (SOA) format with the AMC/RTA.

However, a Demat account is required if you want to invest in Exchange Traded Funds (ETFs) or buy/sell units of close-ended funds listed on the stock exchange.

SIP (Systematic Investment Plan): Investing a fixed amount of money at regular intervals (e.g., monthly, quarterly) in a chosen mutual fund scheme. It helps in rupee cost averaging and instills investment discipline.

Lumpsum: Investing a one-time, larger amount in a mutual fund scheme. This is often suitable when you have a significant amount available at once, but timing the market can be challenging.

The minimum investment amount varies significantly depending on the scheme and the mode of investment (SIP or Lumpsum).

• SIPs often start from as low as ₹100 or ₹500 per installment.
• Lumpsum investments typically require a minimum of ₹1,000 or ₹5,000, but can be higher for certain schemes.

Always check the Scheme Information Document (SID) for specific details.

Direct Plan: You invest directly with the AMC without involving a distributor. These plans have a lower expense ratio because no distributor commission is paid.

Regular Plan: You invest through a distributor or advisor (like Nidhi Capital). These plans have a slightly higher expense ratio as it includes the commission paid to the distributor for their services (advice, convenience, support).

While Direct plans have lower costs, Regular plans offer the benefit of professional guidance and support, which can be valuable for many investors.

Equity funds primarily invest in stocks (shares) of companies. They aim for capital appreciation over the long term and carry higher risk compared to debt funds. They are categorized based on market capitalization (Large Cap, Mid Cap, Small Cap), investment style (Growth, Value), or sector (e.g., Banking, IT, Pharma).

Debt funds primarily invest in fixed-income securities like government bonds, corporate bonds, treasury bills, and money market instruments. They aim to provide regular income and capital preservation. They carry lower risk than equity funds but are subject to interest rate risk and credit risk. Categories include Liquid, Ultra Short Duration, Short Duration, Medium Duration, Long Duration, Gilt, Corporate Bond, Credit Risk funds, etc., based on the maturity profile and credit quality of underlying instruments.

Hybrid funds invest in a mix of equity and debt instruments. The allocation depends on the type of hybrid fund (e.g., Aggressive Hybrid, Balanced Advantage, Conservative Hybrid, Multi-Asset Allocation). They aim to provide a balance between growth and stability, offering diversification across asset classes within a single fund.

ELSS (Equity Linked Saving Scheme) are diversified equity mutual funds that offer tax benefits under Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakh per financial year. They come with a mandatory lock-in period of 3 years from the date of investment for each installment/lumpsum.

Index Funds: These are passively managed funds that aim to replicate the performance of a specific market index (like Nifty 50 or Sensex). They buy stocks in the same proportion as they exist in the index. They typically have very low expense ratios.

ETFs (Exchange Traded Funds): Similar to index funds, they often track an index, commodity, or basket of assets. However, ETFs are traded like stocks on stock exchanges throughout the trading day. You need a Demat account to buy/sell ETFs.

Liquid funds are a type of debt mutual fund that invests in very short-term money market instruments (like Treasury Bills, Commercial Paper, Certificates of Deposit) with maturities up to 91 days. They aim to provide high liquidity, safety of capital, and modest returns, making them suitable for parking surplus funds for short periods.

International Funds: These funds invest in equities or debt of companies listed outside India, providing geographical diversification.

Fund of Funds (FoFs): These funds do not invest directly in stocks or bonds but invest in other mutual fund schemes (domestic or international). An international FoF invests in units of overseas mutual funds.

Yes, all Mutual Fund investments carry some level of risk, as the value of underlying securities can fluctuate. The level of risk varies significantly:

• Equity Funds: Highest risk (market risk), potential for highest returns.
• Debt Funds: Lower risk than equity, subject to interest rate risk (NAV falls when interest rates rise) and credit risk (risk of the borrower defaulting).
• Hybrid Funds: Risk level depends on the equity/debt allocation.
• Liquid Funds: Lowest risk among debt funds.

SEBI mandates a Risk-o-meter for each scheme, indicating its risk level (Low, Low to Moderate, Moderate, Moderately High, High, Very High).

No, returns from Mutual Funds are not guaranteed (except for specific, rare capital protection-oriented schemes, which also have conditions). Returns depend on the performance of the underlying assets (stocks, bonds) in the portfolio, which are influenced by market conditions, economic factors, and fund management decisions. Past performance is not indicative of future results.

Returns are primarily reflected through the change in NAV. Calculations include:

• Absolute Return: Simple increase in value over a period, usually less than a year. Formula: `((Current NAV - Initial NAV) / Initial NAV) * 100`.
• CAGR (Compounded Annual Growth Rate): Used for periods over one year, it shows the average annual growth rate on a compounded basis.
• Total Return: Considers both NAV appreciation and any IDCW (dividends) received.

The Expense Ratio represents the annual fee charged by the AMC to manage the mutual fund scheme. It covers costs like fund management fees, administrative expenses, registrar fees, marketing costs, etc. It is expressed as a percentage of the fund's average assets under management (AUM) and is deducted from the fund's NAV daily on a pro-rata basis. Direct plans have a lower expense ratio than Regular plans.

An Exit Load is a fee charged by some mutual fund schemes if you redeem (sell) your units before a specified period from the date of investment. It is expressed as a percentage of the NAV at the time of redemption. The purpose is often to discourage short-term trading. Many funds (like liquid funds) have zero exit load, while equity funds might have an exit load (e.g., 1%) if redeemed within 1 year.

A benchmark is a standard index (like Nifty 50, Nifty Midcap 150, CRISIL Liquid Fund Index) against which the performance of a mutual fund scheme is measured. It helps investors assess whether the fund manager has outperformed or underperformed the market segment the fund operates in.

Taxation depends on the holding period (Date of redemption - Date of investment):

• Short-Term Capital Gains (STCG): If held for 12 months or less. Taxed at a flat rate of 15% (+ surcharge & cess).
• Long-Term Capital Gains (LTCG): If held for more than 12 months. Gains up to ₹1 lakh in a financial year are tax-free. Gains above ₹1 lakh are taxed at 10% (+ surcharge & cess) without indexation benefit.

IDCW received is added to your total income and taxed according to your applicable income tax slab.

(Note: An equity fund is one that invests >= 65% in domestic equity shares).

As per amendments effective from April 1, 2023:

• Capital gains from investments made in specified debt mutual funds (investing <= 35% in domestic equity shares) on or after April 1, 2023, are treated as Short-Term Capital Gains (STCG) regardless of the holding period.
• These STCG are added to your total income and taxed at your applicable income tax slab rate.
• The earlier regime of LTCG with indexation benefit for holding periods over 36 months applies only to investments made before April 1, 2023.

IDCW received is added to your total income and taxed according to your applicable income tax slab.

Indexation is a way to adjust the purchase price of an asset for inflation, thereby reducing the taxable capital gain. It uses the Cost Inflation Index (CII) notified by the government.

For Debt funds invested before April 1, 2023, and held for more than 36 months, the indexed cost of acquisition is calculated as: `(Purchase Cost * CII of Year of Sale) / CII of Year of Purchase`. LTCG is then calculated as `Sale Value - Indexed Cost of Acquisition` and taxed at 20% (+ surcharge & cess).

Indexation benefit is generally not available for Equity fund LTCG or Debt fund gains on investments made on or after April 1, 2023.

Investments made in ELSS funds qualify for deduction from your gross total income under Section 80C of the Income Tax Act, up to a maximum limit of ₹1.5 lakh per financial year (combined with other 80C investments like PPF, EPF, etc.). ELSS funds have a 3-year lock-in period. The LTCG rules (taxable above ₹1 lakh at 10%) apply upon redemption after the lock-in.

For Resident Investors: Generally, no TDS (Tax Deducted at Source) is applicable on capital gains from mutual fund redemptions.

For NRI Investors: Yes, TDS is applicable on capital gains for NRI investors as per rates specified in the Income Tax Act (typically higher for STCG than LTCG).

For IDCW: TDS may be applicable on IDCW distribution above a certain threshold (currently ₹5,000 per financial year per scheme per investor) at a rate of 10% (or 20% if PAN is not available/linked). NRIs may have different TDS rates based on DTAA.

You can redeem units through the same channel you invested through:

• AMC Website/App: Log in to your account and place a redemption request.
• Distributor/Advisor Portal (like Nidhi Capital's platform): Use the platform to submit the redemption request.
• RTA (Registrar and Transfer Agent) Website: Agencies like CAMS or KFintech manage records for AMCs; you can often redeem via their portals.
• Physical Form: Submit a signed redemption request form at an AMC branch or CAMS/KFintech service center.

You'll need your Folio Number and bank account details (which should be pre-registered).

The time taken depends on the fund type:

• Liquid Funds / Overnight Funds: Typically T+1 working day (Transaction day + 1 working day).
• Debt Funds (other than Liquid/Overnight): Typically T+2 working days.
• Equity Funds: Typically T+2 working days (as per SEBI's revised settlement cycle from Jan 2023, previously T+3).

T refers to the day the valid redemption request is accepted by the AMC (subject to cut-off times).

Cut-off timing is the time by which your investment or redemption application (and funds, for purchase) must reach the AMC/RTA to be processed at that day's NAV. If received after the cut-off time, the next business day's NAV applies.

• Liquid/Overnight Funds: Cut-off for purchase and redemption is typically 1:30 PM.
• Other Funds (Equity, Debt, Hybrid): Cut-off for purchase and redemption is typically 3:00 PM.

Timings can vary slightly and are subject to change by SEBI/AMCs. Always check latest timings.

A 'Switch' involves redeeming units from one scheme and simultaneously investing the proceeds into another scheme within the same fund house (AMC). It is treated as a redemption from the source scheme (attracting exit load and capital gains tax, if applicable) and a purchase into the target scheme. You can submit a switch request through the same channels used for redemption/purchase.

You need to submit a specific request form (available on AMC/RTA websites) for non-financial changes like updating address, mobile number, email ID, bank mandate, or nomination details. This usually needs to be submitted physically with required proofs (like a cancelled cheque for bank details) at an AMC branch or RTA service center, or sometimes can be done online via authenticated portals.

The process is called Transmission.

• If Nomination is registered: The nominee(s) can claim the units by submitting a transmission request form along with the death certificate, KYC documents of the nominee, and other required documents to the AMC/RTA.
• If No Nomination: The legal heirs will need to submit the transmission request form along with the death certificate, KYC documents of the heirs, and legal documents establishing their claim (like a Will, Letter of Administration, or Succession Certificate), which can be a more complex process.

It's highly recommended to register a nominee for all investments.