Sebi in June 2022 had mandated nominations or opting out of nominations for all the existing individual unitholders.
Tax treatment for gains made on investments through NPS Tier-II accounts ought to be similar to that of mutual funds, but remains a grey area in the absence of a formal government notification, say tax experts
Though there is a clear tilt towards open-ended funds, some wealth managers prefer to play it safe with target maturity funds (TMFs). Broadly, it makes sense to invest in a scheme the duration of which matches your investment time-frame.
Finance minister Nirmala Sitaraman proposed the amendment to introduce marginal relief, implying that the tax liability cannot be greater than the income that exceeds the threshold.
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Debt funds' indexation benefit is only till March 31.
Arbitrage funds have friendlier taxation
With the indexation benefits gone, debt funds will focus on generating better returns compared to bank fixed deposits. If that happens, they will still be a good bet for long-term fixed-income investors
Though experts are recommending short to medium-duration products for the regular investor, savvy investors are eyeing long-duration funds like Bharat Bond 2031 ETF and Bharat Bond 2032 ETF as well.
Investors should look at their asset allocation, and if there’s a need to buy more international funds, only then should they invest. Taxation shouldn’t be the only reason to invest, experts say
In a big blow to mutual fund (MF) investors, capital gains from debt funds and certain other categories of non-equity MFs are set to be taxed at a higher rate.
The amendment to the Finance Bill, 2023, proposes to bring taxation of debt mutual funds on par with other debt instruments, like fixed deposits, by abolishing long-term capital gains. This also closes the indexation facility that came with it.