Taxation of debt funds bought before 31st March 2023

[tarun2]

With the recent changes in the Budget July 2024, what will happen to the debt funds bought before 31st March 2023, will they get the indexation benefit as said in the Budget 2023?

[Akash_Shah]

Nope, indexation is gone.
Now if you were holding that grandfathered debt for more than 2 years, you will pay 12.5% ltcg. Less than 2 years, you pay slab rate.
Below is nice explainer by PPFAS MF

[Chirag1]

Has Debt Mutual Funds been nuked by Budget 2024 - General - Trading Q&A by Zerodha - All your queries on trading and markets answered (tradingqna.com)

I had posted here, it’s a bit of a backstab if you give 60 days of time last budget and then a year later kill indexation.
For other assets classes, such commitment was not given.

[Akash_Shah]

I understand the emotion, but nothing you can do about it.
Always remember, any commitment made by govt in a budget, is only valid till next budget

[SachinSingh]

@Chirag1

if you give 60 days of time last budget

It wasn’t even 60 days. Snuck in an amendment on 24th March (Friday).

No more LTCG benefit for debt/gold/international funds/Fund of funds

A complete bolt from the blue for the mutual funds sector. [image] As per many reports, Starting April 1st, 2023, Mutual fund investments having not more than 35% invested in equity shares of an Indian co (every other MF excluding equity oriented MF) to be deemed short-term capital gains That means the indexation benefit is lost for all the Debt/Gold / International funds / FoFs going forward once the amendments are passed in the parliament later today. If all gains from debt mutual fund sch…

Got screwed over with both these changes.

@Chirag1

it’s a bit of a backstab

And speaking of backstab

Not even just one instance, plenty of times during the last regime, the Ministry or the FM herself had “assured” that there would be no changes…

[Quicko]

Hi @tarun2,

Indexation will no more be available and LTCG tax will be applicable at a flat rate of 12.5%.