Government gave a strong shock to investors, now debt will have to be paid on mutual funds. Tax like FD

The bill proposed that from April 1, mutual funds associated with investment in bonds or fixed-income products would incur short-term capital gains tax.

The Finance Bill has passed in the Lok Sabha on Friday amid uproar in Parliament। The government has made several major changes in this finance bill। Talking about major changes, the government has taxed the security transaction tax and the bonded mutual fund। According to experts, the proposed amendments may adversely affect the market। Explain that the bill giving effect to the taxation proposal for FY 2023-24 was passed in the Lok Sabha on Friday। The government made 64 official amendments to the bill.

The bill proposed that from April 1, mutual funds associated with investment in bonds or fixed-income products would incur short-term capital gains tax। The investors used to get the benefit of long term capital gains tax on this and hence this investment was popular। However, this will apply when mutual fund companies invest less than 35 percent of the debt’s total assets in equity। After this, investors will have to pay tax in line with the slab.

After this amendment that shocked investors, it has now become equivalent to other interest based investments। At the same time, the government has given a little more relief to taxpayers in the new system of income tax। In addition, other amendments include increasing the tax rate on royalties and increasing technical services fees from 10 per cent to 20.

Opposite effect on market

Vedanta Asset Chairman and Managing Director Lalit Tripathi Said that the benefit of inflation from bonded funds has been eliminated। He said that after April, investment in market related loan letter ie MLD will be short term capital asset। With this, the long-term investments of the East will end and the mutual fund industry will have a slow negative impact.

PhDCCI President Saket Dalmia said that That growth is an unexpected step, even at a time when market fluctuations are overshadowed। This will affect market perception and trade। We urge more clarity as the notifications previously issued by the Ministry of Finance stated an increase in STT on the sale of futures and options i.e. F&O contracts.

Manik Wadhwa, Strategic Director at SKI Capital Said that financial markets have shown flexibility in adjusting regulatory changes and tax adjustments in the past। Sandeep Bagla, CEO of Trust Mutual Fund, said that despite tax benefits in the last one to two years, mutual funds have seen withdrawals in loan schemes.

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