HomeInvestingMutual FundsNew Mutual Fund rules getting applicable from 1 April 2023. Check details

New Mutual Fund rules getting applicable from 1 April 2023. Check details

As a big blow for Mutual Fund (MF) investors, the government is planning to propose in the Finance Bill that investments in mutual funds with less than 35% invested in equity shares of Indian companies would henceforth be considered short-term capital gains. This applies to investments made on or after April 1, 2023. Presently, one of the most compelling reasons to invest in debt funds is the tax benefit they provide over fixed deposits. Also, debt funds held for more than three years will no longer benefit from indexation.

“I hope the proposed change in the Finance Bill to remove LTCG with indexation status on debt funds is reviewed. Financialization is just happening in India and a vibrant corporate bond market needs a strong debt MF ecosystem,” tweeted Radhika Gupta – Managing Director & Chief Executive Officer, Edelweiss Asset Management Limited.

Market-linked debentures (MLD), which are also meant to be taxed as short-term capital gains, were another big surprise in Budget 2023.

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