Key Points
Mutual funds have emerged as a popular investment option in India, offering the dual advantage of expert money management and tax-efficient returns..
However, to maximize the tax efficiency of mutual fund investments, its crucial to understand the different distribution types and taxation methods...
The taxation of mutual fund gains in India is primarily based on two factors: the type of mutual fund and the holding period...
Short-term capital gains tax for debt mutual funds is charged as per the investor's income tax slab rates..
The equity portion is taxed as per equity mutual fund taxation rules, while the debt portion is taxed as per debt mutual fund taxation rules.. Understanding the dichotomy between short-term and long-term capital gains taxes for various types of mutual funds is crucial for investors..
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Debt Mutual Funds Will Lose Tax Advantage Starting April
24, Mar, 23Finance ministry moves to correct tax arbitrage between debt funds and fixed deposits.
Finance Bill: How will new Mutual Fund rules impact investors from April 1?
24, Mar, 23New Mutual Fund rules All existing investments and new investments made in debt MFs before March 31 will not be affected by the proposed mutual fund tax change
HNIs preferring FDs over debt mutual funds: Report
11, May, 23High Net Worth Individuals (HNIs) in India are turning away from debt mutual funds towards bank fixed deposits (FDs) due to recent tax changes and rising interest rates, according to a report by Motilal Oswal Financial Services. HNIs also prefer AIFs and PMS, as mutual funds are becoming more commoditised. The report showed that HNIs have failed to maintain higher-ticket systematic investment plans (SIPs) due to the low returns via this route.
No LTCG tax benefit on these debt mutual funds from April 1: Five important queries answered
24, Mar, 23Currently, income tax laws allow taxation of these debt mutual fund schemes on the basis of a holding period. Short-term capital gains are taxed at tax rates applicable to your income. However, if the holding period exceeds 36 months, then gains are called long-term capital gains (LTCG). These long-term capital gains are taxed at 20% with an indexation benefit.
Debt mutual funds to lose LTCG benefit: Should you still invest? Should you rush before financial year ends?
24, Mar, 23Investors that used the tax arbitrage to maximise gains will now have to look at gross returns, instead of post-tax returns.
Corporate appetite for debt funds likely to wane
25, Mar, 23Currently, debt fund investments of over three years qualify for long-term capital gains tax.
Indexation benefit on LTCG gone, should you still stay with debt MFs?
25, Mar, 23The benefit of indexation for calculation of LTCG on debt mutual funds will not be available for investments made on or after April 1, 2023
Who can continue to invest in debt mutual funds after March 31? Nilesh Shah explains
28, Mar, 23Nilesh Shah of Kotak AMC states that investments made before 31st March 2023 will continue to get the benefits of long-term capital gains and indexation. However, investors in the upper tax bracket will have to pay higher taxes. Shah believes that the AMC industry will have to focus more on financial education, as investors must be smart in understanding how they park their money. There are also many other potential options in the mutual fund industry, such as short-term bond funds, floating rate funds, and guilt funds.
How to Choose the Right Tax-Saving Mutual Funds
24, Jul, 23Read to learn how to choose the right tax-saving mutual fund by understanding the importance of such investments and the benefits they offer
To get long-term capital gains benefit, MFs re-open overseas investment funds
27, Mar, 23Mutual fund houses are re-opening their international funds for investment due to the potential loss of long-term capital gains tax benefits if invested after the end of March.