Is monthly income from a systematic withdrawal plan taxable?

I am a 63 year old female doctor. For my retirement, and for covid, I sold one of my clinics. I invested that amount in a systematic monthly withdrawal plan. My clinical practice is a quarter of what it was before covid. Is the monthly amount obtained from SWP taxable income?

Dr. Vipin Sehgal

Redemptions under a systematic withdrawal plan are taxable. For debt funds, if the holding period is less than 36 months, the withdrawn amount will be part of the income and will be taxed according to the income slab. On the other hand, if the holding period exceeds 36 months, long-term capital gains will be taxed at 20% with an index.

For equity funds, withdrawals are taxed at a rate of 15% if the holding period is less than one year, while long-term capital gains are taxed at 10% without an index if the holding period exceeds one year.

I am 28 years old and am a civil servant. Currently, the salary is 40,000. 50,000 rupees in my savings. I would like to invest in a low-risk area to make more money, but please suggest.

Vinit Dubey

It is always advisable to secure at least 10% as an emergency fund that can invest in arbitrage funds. The remaining savings can be used to create a mutual fund portfolio of debt, equity and hybrid funds.

10% of your savings can be equally invested in the Edelweiss Arbitrage Fund and the Kotak Equity Arbitrage Fund. 40,000 each via a 10-month STP route in the equity categories of the Canara Robeco Flexi Cap Fund, UTI Flexi Cap Fund and Mirae Asset Mid Cap Fund.lump sum 90,000 each in the Aditya Building La Sun Life Balanced Advantage Fund and the ICICI Prudential Balanced Hybrid category Maintained Rs 50,000 each in the debt categories of HDFC Corporate Bond Fund and IDFC Bond Fund Short Term Fund.

50,000 can be invested in high quality corporate FDs such as Bajaj Finance and HDFC. In this way, the portfolio is diversified into asset classes, categories, schemes and AMCs. We also recommend that you continue to review your portfolio at least once a year.

Sanjiv Bajaj, co-chairman and MD of Bajaj Capital, responded. Queries and views at

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Is monthly income from a systematic withdrawal plan taxable?

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