How Mutual Fund Investments will benefit from the Budget?

Mutual fund (MF) investors have something to cheer from the budget. Scheme mergers will no longer be considered as fresh investments, allowing investors to make exits earlier without incurring taxes. For instance, long-term MF investors were deemed fresh investors the moment a scheme was merged with another one.


This anomaly is now being rectified as the budget has offered tax neutrality for scheme mergers. "There will be no tax impact at the time of merger. Scheme mergers will no longer be treated as sale of fund at the time of merger," says Vidya Bala, head, MF research, FundsIndia.com, an online platform for MFs. "The relevant date (for taxation) is the date of original purchase and not the merger date," she says. "MFs can undertake consolidation of schemes," says A Balasubramanian, CEO, Birla Sun Life MF.

via: The Times Of India