The death of debt funds: Debt funds held over 3 years to no longer enjoy indexation benefit, long-term capital gains set to go

[theglobalinvestor]

This is a major blow to all debt funds...

Finance Bill 2023: Debt mutual funds held over 3 years to no longer enjoy indexation benefit, long-term capital gains set to go

Finance Bill 2023: Currently, investors in debt funds pay income tax on capital gains according to their income tax slab for a holding period of three years and after that, they are taxed at the rate of 20 percent with indexation benefits or 10 percent without indexation.

www.cnbctv18.com

 

[bugmenot]

This seems a result of bank lobbying. Now people will flock to FD again. Debt fund vs FD saga over.

Only benefit is offsetting of gains with loss

 

[jade]

Also effects FoF and international funds. Without indexation benefits and LTCG tax, FDs have become more attractive than debt funds.

 

[ronakshah]

If someone was planning to invest in debt funds, you can do it before 31st March and still get the indexation benefits.

 

[dadofjohnwick]

Yes; seems like govt wants to push people to go towards equitites or buy their own G-sec T bills. Now for debt, the only legible option left is T-Bills or else take on higher risk and put in equitites.

 

[jainsuk]

If someone was planning to invest in debt funds, you can do it before 31st March and still get the indexation benefits.

If I sell debt MFs before March 31, will I get LTCG benefits?

 

[jade]

If I sell debt MFs before March 31, will I get LTCG benefits?

Yes, there is no problem even if you continue with them. There would not be any indexation benefit on new investments in debt MF after April 1st.

 

[jainsuk]

Yes, there is no problem even if you continue with them. There would not be any indexation benefit on new investments in debt MF after April 1st.

Thanks!