Finance Bill 2023 introduced by FM Nirmala Sitharaman has proposed that investments in mutual fund where not more than 35 percent is invested in equity shares of Indian company i.e. debt funds, will now be deemed to be short-term capital gains.
As per the proposal debt funds held for more than three years will no longer enjoy indexation benefit.
Earn money - Pay tax on it.
Spend money - Pay tax on it.
Invest money to grow it - Pay tax on the amount earned.
What's next?
BAT_MAN wrote:Any suggestion for medium term? Was looking for debt fund from last few month..
Now i have to do it
@Ramta_Jogi
@Bk100
@kukdookoo
@InvestPotato
Get long duration funds. When interest rates falls they are the most beneficial.
Bk100 wrote:You will get amount with in 3 days of redemption just like equity mutual fund. So liquidity is not a issue here. After 1 year your redemption will be treated as long term capital gain and exempted up to 1 lakh.
3 days is wayyy tooo long. I need money instantly.. Like 5 seconds type. So it's only FDs to go.
makdiman wrote:Earn money - Pay tax on it.
Spend money - Pay tax on it.
Invest money to grow it - Pay tax on the amount earned.
What's next?
Life long penalty and Death Tax
Bk100 wrote:I think this also lost indexation benefits with latest amendment. Or is it spared.?
Yeah. Tmf too lose indexation benefit [email protected]. g April 1. That's why @Jarvis mentioned this week as end
BAT_MAN wrote:i have said this months ago,they want us to invest in cowsoft and adani.taxing us so that da of their employees can be increased(check yesterday's news) and banks have more money to lend to friends. @guest_999Any suggestion for medium term? Was looking for debt fund from last few month..
Now i have to do it
@Ramta_Jogi
@Bk100
@kukdookoo
@InvestPotato
makdiman wrote:There is a very famous quote/American saying: There are only 2 absolute truths in the world, death & taxes.Earn money - Pay tax on it.
Spend money - Pay tax on it.
Invest money to grow it - Pay tax on the amount earned.
What's next?
Ramta_Jogi wrote:So, anything with over 65 percent allocation to equity is (and was) taxed as an equity MF - 10 percent LTCG and 15 percent stcg that is If you are talking of hybrid equity MF.. They maintain their status quo like before.
However, if you are talking of debt hybrid (usually 50:50 or 25:75 - equity:debt) then that would come under this new rule starting Apr 1.
Dynamic Asset allocation funds (DAAF - also called equity & debt ) usually have 50:50 hybrid.
NFO from quant (DAAF) launched today - It's sid was changed from 50:50 to 65:35 just to escape this new rule from messing up its prospects - which makes it akin to a balanced advantage fund.. Although it already had that one going but oh well..
Just to add to info - this removal of indexation applies to some other funds too like Gold MF and International MFs.
I guess it's effective from next fy. If one invests in a long-term debt fund right now, he can still save in the future contributions
Bk100 wrote:P. S - I suggest you look at arbitrage funds after exhausting ppf. These funds give equivalent returns of debt funds and treated as equity funds in taxation.
https://www.moneycontrol.com/mutual-funds/perfo...
Have you checked these funds @Ramta_Jogi
Yes, they are better.... I used to keep my surplus money in Arbitrage fund 2-3 years back. And got around 6% tax-free returns.
BAT_MAN wrote:Any suggestion for medium term? Was looking for debt fund from last few month..
Now i have to do it
@Ramta_Jogi
@Bk100
@kukdookoo
@InvestPotato
UTI Dynamic Bond Fund
I'm planning to hold on to it at least for 3 years for some kinda returns. After that will move that money elsewhere (except FD🫤)
A running NFO of a dynamic asset allocation fund by quant had their emergency meeting just after the declaration and switched from debt to equity+derivatives hedging... smart!
One can check their new offer PDF here, so industry is reacting accordingly...
Agnivo007 wrote:fund name pleaseA running NFO of a dynamic asset allocation fund by quant had their emergency meeting just after the declaration and switched from debt to equity+derivatives hedging... smart!
One can check their new offer PDF here, so industry is reacting accordingly...
This is the revised communication I was speaking about: @rogerthat
Dear Investors,
Greetings from quant Mutual Fund!
As you are aware from our previous communications, our New Fund Offer of quant Dynamic Asset Allocation Fund (quant DAAF) is currently underway. The fund enjoys a wide flexibility to rebalance the portfolio between equity, debt, and derivatives depending on our view on Risk-on or Risk-Off environment.
The fund was initially intended for risk-averse investors, with an equally low risk appetite for volatility, preferring fixed income returns. Therefore, the scheme was endeavoring to deliver superior returns than fixed deposits with a high quality debt oriented portfolio. We had illustrated in our previous communications that quant DAAF would benefit long term investors by rendering the difference between debt and equity taxation to an insignificant 66 basis points (0.66%) over a five years holding period, due to indexation benefit on long term capital gains. These projections were made on the basis of the prevailing Income tax rates.
Today, the Parliament passed the Finance Bill, 2023 along with certain amendments. The most significant amendment was the withdrawal of the benefit of indexation on long term capital gains on debt mutual funds for investments made on or after April 1, 2023. From April 1, 2023, debt mutual fund schemes will be taxed at Income tax rates applicable to an individual’s income tax slab. This has significantly affected our earlier positioning and consequently the strategy of quant DAAF from a taxation perspective.
In view of this impact, and in the larger interest of our investors, quant AMC has unanimously decided to reposition the quant DAAF and modify its taxation from debt to equity due to said amendments to the Finance Bill, 2023. Therefore the amended investment strategy of quant DAAF, superseding our previous communication, stands as:-
The unique feature of the scheme stems from its mandate to dynamically rebalance equity exposure (0 to 100%) and debt exposure (0 to 35%), in line with our view on Risk-On or Risk-Off environment, to earn superior risk-adjusted returns. quant money managers have full flexibility and can even hedge up to 100% equity exposure by using derivative instruments in extreme risk-off environment.
quant DAAF aims to capture upside in the bull phase and limit the downside in the bear phase and thus reduce the volatility of the overall portfolio.
Even under its newly repositioned avatar, the product is positioned towards traditional investors. In line with our dynamic style of money management, quant DAAF portfolio will be managed dynamically in line with our Risk-On or Risk-Off view on macro environment. Investors can expect to benefit from our VLRT Framework which is an overarching framework for all our funds.
guest_999 wrote:
What about hybrid MFs?
I have changed my earlier reply to your query. This just came in from my IA:
Mutual funds having equal to or more than 35% but less than 65% equity, eligible for indexation will continue to be taxed at 20%.
So a 35:65 or 50:50 fund would continue to be taxed under LTCG with indexation.
@kukdookoo @BAT_MAN
Vote for BJP.... 
This is what I think: government wants everyone to enroll into new tax regime. Which simply states, just tell me your income, pay tax and done. Rather than showing 100 proofs of different investments/expense, half of them being fake. Hassle for tax payer, opportunity for corruption for ITO. Simplified tax model would save hundreds of hours for both tax payer and ITO. Tax evasion becomes difficult in a nutshell. However, most of the people who save tax happily by investing in these schemes and are legitimate and transparent with their income, are at loss. I do like the old tax regime myself, but I think this might be a long term plan. Now unless the benefits come back in terms of other forms of tax relaxations, this all would seem useless to a regular person.
Agnivo007 wrote:This is the revised communication I was speaking about: @rogerthat
Dear Investors,Greetings from quant Mutual Fund!
As you are aware from our previous communications, our New Fund Offer of quant Dynamic Asset Allocation Fund (quant DAAF) is currently underway. The fund enjoys a wide flexibility to rebalance the portfolio between equity, debt, and derivatives depending on our view on Risk-on or Risk-Off environment.
The fund was initially intended for risk-averse investors, with an equally low risk appetite for volatility, preferring fixed income returns. Therefore, the scheme was endeavoring to deliver superior returns than fixed deposits with a high quality debt oriented portfolio. We had illustrated in our previous communications that quant DAAF would benefit long term investors by rendering the difference between debt and equity taxation to an insignificant 66 basis points (0.66%) over a five years holding period, due to indexation benefit on long term capital gains. These projections were made on the basis of the prevailing Income tax rates.Today, the Parliament passed the Finance Bill, 2023 along with certain amendments. The most significant amendment was the withdrawal of the benefit of indexation on long term capital gains on debt mutual funds for investments made on or after April 1, 2023. From April 1, 2023, debt mutual fund schemes will be taxed at Income tax rates applicable to an individual’s income tax slab. This has significantly affected our earlier positioning and consequently the strategy of quant DAAF from a taxation perspective.
In view of this impact, and in the larger interest of our investors, quant AMC has unanimously decided to reposition the quant DAAF and modify its taxation from debt to equity due to said amendments to the Finance Bill, 2023. Therefore the amended investment strategy of quant DAAF, superseding our previous communication, stands as:-The unique feature of the scheme stems from its mandate to dynamically rebalance equity exposure (0 to 100%) and debt exposure (0 to 35%), in line with our view on Risk-On or Risk-Off environment, to earn superior risk-adjusted returns. quant money managers have full flexibility and can even hedge up to 100% equity exposure by using derivative instruments in extreme risk-off environment.quant DAAF aims to capture upside in the bull phase and limit the downside in the bear phase and thus reduce the volatility of the overall portfolio.Even under its newly repositioned avatar, the product is positioned towards traditional investors. In line with our dynamic style of money management, quant DAAF portfolio will be managed dynamically in line with our Risk-On or Risk-Off view on macro environment. Investors can expect to benefit from our VLRT Framework which is an overarching framework for all our funds.
interesting. Thanks for sharing bro. 30 Karma 🛐✝️ given
Tax on everything
Jarvis.-. wrote:In short term capital loss can also come. Be carefulCheck bharat bond 2025 yield is above 7% and being a fixed maturity fund if u hold till maturity u'll get that 7% above return (in theory), to get indexation benefit of this last week u need bharat bond 2026 or above though
Ramta_Jogi wrote:paji for international funds, what are your thoughts?i mean sip now or not? @Snapz @KochiroI have changed my earlier reply to your query. This just came in from my IA:
Mutual funds having equal to or more than 35% but less than 65% equity, eligible for indexation will continue to be taxed at 20%.
So a 35:65 or 50:50 fund would continue to be taxed under LTCG with indexation.
@kukdookoo @BAT_MAN
After watching numerous documentaries and reading books, i have come to conclusion that government as an entity is a scam, a sham in lot of countries, including india, usa, china, Russia. Not just in North Korea, shrilanka, Pakistan etc.
And government's primary job is to keep majority population in illusion, isolated from the reality, while enslaving the masses.
Their modus operandi or strategy is different in different parts of the world but all play the same game.
It sounds crazy or funny or ridiculous but it resembles the movie matrix where humans are treated as resource while showing la la land in their dreams.
And i am not into drugs or hallucinating to say this 
.
For anyone interested to invest before 31st, below are few pointers based on my findings.
1. Long term debt - Gilt funds- icici gilt and SBI gilt fund
2. Medium term - Dynamic bond fund - UTI dynamic bond, ICICI all seasons
3. Short term - icici short term
pentagon4tw714 wrote:Any idea when should long term debt fund be preferred over FD?For anyone interested to invest before 31st, below are few pointers based on my findings.
1. Long term debt - Gilt funds- icici gilt and SBI gilt fund
2. Medium term - Dynamic bond fund - UTI dynamic bond, ICICI all seasons
3. Short term - icici short term
![boAt Storm 1.3" CurvedDisplay Smartwatch (Black Strap, Regular) [ For Flipkart Firedrops Users]](https://cdn0.desidime.com/topics/photos/1654921/medium/-original-imagbnnrs7ngq8w6.jpeg?1695574890)
![Paytm Flat 15 Cashback of minimum recharge of 15 or more [May be Bug]](https://cdn0.desidime.com/topics/photos/1654933/medium/paytm_logo.png?1695578608){kind=logo}
He invests in fd @ 7% interest for 3yr
Total return after 3 yr ~22%
Tax on that @ 30% = 6.6%
Net return from fd in 3yr = 15.4%
Now, instead of fd he invests in debt fund for 3yr @ 7% yield (fixed maturity product)
Total return after 3 yr ~ 21%
Indexation benefit = 18% ( assuming 6% inflation)
Tax @ 20% on rest = (21-18)*0.2 = 0.6%
Net return from debt in 3yr = 20.4%
No warning, no notice. Govt. wants to milk out citizens.
Every year or two they change the rules, then How ppl will plan their retirement savings.
Yeah. It came out around noon.
More like a way to recapitalise banks. Inflows to FDs would increase substantially.