Is the surrender value on a pension fund from a mutual fund (MF) taxable?
—Ramesh Subramanian
Retirement or pension funds from MFs are nothing but tax-sheltered investment instruments that offer tax deductibility under section 80C of the Income-tax Act, 1961. The money accumulated in these funds are like in any other MF, and can be redeemed after the lock-in period (which differs between different funds) is completed. The concept of a surrender value does not apply here as in the case of insurance policies. These funds are redeemed just like any other mutual fund.
