Ch.8 · Dividend and STT Taxation · medium
What was the major change in debt mutual fund taxation introduced in April 2023?
0% of students got this wrong
EXPLANATION
The Finance Act 2023 removed the LTCG benefit (20% with indexation) for debt mutual funds effective April 1, 2023. Now, gains from debt mutual funds (where equity is less than 65%) are taxed at the investor's income tax slab rate regardless of holding period — effectively eliminating the tax advantage that debt funds previously had over fixed deposits. This was a significant change that reduced the tax-efficiency of debt funds for investors in higher tax brackets.
Practising Chapter 8 one question at a time?
Try the full chapter — 80 questions, tracked score, weak area breakdown.