How does a mutual fund's tax efficiency compare to a bank Fixed Deposit (FD) for an investor in the 30% tax bracket?

EXPLANATION

For a 30% bracket investor: FD interest is taxed at 30% + surcharge/cess annually (TDS at 10%). Equity mutual fund LTCG is 12.5% — a massive tax efficiency advantage. Post-April 2023, debt fund gains are also at 30% slab rate — removing the previous tax advantage over FDs. However, mutual fund gains are taxed only on redemption (not annually like FD interest), giving a timing advantage even for debt funds.