Accounting, Valuation and Taxation of Mutual fund in lndia

Mutual Funds Accounting

Joint accounting is a critical issue in the financial system, given the growing popularity of joint ventures in addition to the direct holding of securities such as shares and bonds by the investment community. In particular, many, if not most, individual investors and trading clients have the majority of their savings in employer-sponsored programs 401 (k), which generally offer joint venture options as investment options. The end result of the combined cost is the accurate pricing of these investment vehicles and the fair distribution of investment revenue to their owners.
Therefore, this is of great concern to the chief financial officers (CFOs), regulators, and operational managers of mutual fund companies.

Mutual fund accounting covers a wide range of basic functions, which may be performed by internal staff or assigned to other providers, such as supervisor banks. These processes include:

It calculates the value of a daily investment portfolio — also known as total asset value (NAV).
Expect and record all income, such as profits and interest.
Record high interest rates on bonds and other fixed-income securities held in the investment portfolio.
Properly reduce the discount or premium on the purchase of the bond. See detailed explanation below.
Records all securities transactions, such as buying and selling a portfolio investment.
Record all capital gains received, both short-term, and long-term, as a result of securities transactions in the fund.

Record all cash inflows and outflows as a result of investments and redemption of shares by investors.
Keeping records of shares held, as well as transactions made, by each shareholder in the fund.
Track the distribution of income and profit margins made to shareholders in the fund.
In the leading departments of shared accounting, these tasks will be performed more automatically. However, additional manual, revision, and adjustments may be required.

Valuation of Mutual Funds

Mutual Fund Valuation
SEBI has set various rules and regulations for Asset Management Companies (AMCs) to consider the various assets of the partnership fund. This is summarized below:

Securities Related to Equity and Equity
Commercial Shares and Budget-Related Shares – Trading securities, including Increasing Favorite Shares, General Interest Shares, Shares and Partially Paid Rights, are included in the closing price quoted on the Stock Exchange. If the collateral is not traded on the Stock Exchange on a particular day, the amount quoted on the previous trading day may be used to set the asset’s value. The only condition is that the estimated pre-trade day should not be older than 30 days before the measurement date. Ideally, the stock exchange used as a benchmark by the National Stock Exchange (NSE) and if the securities are not traded through the NSE, the asset price on the Bombay Stock Exchange (BSE) is considered.
Retail or Non-Commercial Equity and Securities Related to Equity Shares – Equity or Non-Commercial Equity and Related Securities include Stocks of Fixed Preferred Shares, Ordinary Preferential Shares, Shares and Partially Paid Rights. Less tradable shares or collateral related to equity are those assets sold for less than Rs. 5,00,000 per month, with a total of 50,000 units.
In the event that the collateral is not sold for more than 30 days, Net Worth per share will be calculated as follows: [Share Guaranteed + Deposit (Excluding analytics palaces) – Different Costs and Balance of Withdrawal from P&L Account] / Number of Shared Shares.

The fund’s average capitalization rate, based on NSE or BSE information, will be reduced by 75% to calculate the P / E Rate. For fair value per share, a 10% discount on illliquidity is applied to the value of the total value per share and the amount of revenue received.

Estimated Security Ratings
The final transaction price will be considered in order to quantify fixed shares within no more than 30 days. Appropriate valuation guidelines that apply to small-scale securities will apply to fixed-rate equity estimates for a period of more than 30 days.

Unlisted Bonds
The measure of the unregistered shares of an organization is based on an audited balance sheet available within the nine-month end of the year. The value of each share is calculated as follows:

[Share Savings + Free (Excluding analysis palates) – Different costs] / Number of Shared Shares.


Share More Money + Consideration using Guaranteed / Acquired / Acquired Options + Free Domains (Excluding Analysis Palaces) – Different Costs and Balance of Withdrawals from P&L Account] / Paid Shares Number; any low.

The figure will be based on the tested accounts only. If the EPS is a negative value, it will be considered zero for that year, while the main salary is calculated.

Illiquid Securities Ratings
Illiquid securities are sold cheaply, unregistered and unallocated shares. The total value of these shares should not exceed 15% of the total assets acquired in the joint fund plan. If the combined value of illiquid securities exceeds 15% of the total value of the asset, then the given value is zero.

Mutual Fund Taxation

Joint investments are one of the weird investment options as they help you achieve your financial goals. Shared funds are also tax-free tools. Investing in fixed deposits is a big disadvantage, especially if you fall below the high tax bracket, as interest is added to your taxable income and tax on your income tax rate. This is where mutual funds get better. When you invest in a mutual fund, you get the benefit of a financial management specialist and tax return.

Joint funds provide investors with two benefits; dividends and monetary profits. Shares are paid at company profits if any. When companies have more money, they may decide to share equally with investors in the form of shares. Investors receive shares in proportion to the number of mutual fund units held by them.

The biggest profit is the profits that investors make when the selling price of their mortgage is greater than the purchase price. In simple terms, huge gains are gained by informing the price of the coin fund units. Both dividends and monetary profits are taxed by mutual fund investors.

A mutual fund is an investment vehicle where many investors pool their money to get a return on their capital over time. This financial portfolio is managed by an investment professional known as a fund manager or portfolio manager. It is his job to invest in the collateral in various securities such as bonds, stocks, gold and other commodities and to seek to provide for possible returns. Profits (or losses) on investments are shared jointly by investors in proportion to their contribution to the fund.


Aishwarya Says:

If you are a lawyer or a law student who is looking for a job, then you can find details about the latest openings here.

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.


Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Create a website or blog at

Up ↑

%d bloggers like this: