Tax benefits of hybrid funds: As the financial year comes to an end, it’s important to keep a tab on your tax outgo for FY 2023-24.
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Wealth managers advise conservative investors to consider hybrid schemes before the financial year ends to save on taxes in mutual fund investments, states an ET report.
The government’s removal of indexation benefits for pure debt schemes in Budget 2023-24 makes hybrid funds with 35% to 65% equity allocation a viable option.
Indexation, which adjusts inflation with the asset’s cost, lowers tax liability.
Certain schemes like balanced hybrid, multi-asset, and dynamic asset allocation still offer indexation benefits.
Investors purchasing these schemes before March 31 and holding them till April 1, 2027, will pay a 20% long-term capital gains tax with indexation benefits, gaining an extra year’s advantage.
Viral Bhatt, founder of Money Mantra, suggests that moving funds from bank deposits to such schemes can enhance post-tax returns for low-risk investors.
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Here’s a look at mutual fund schemes where you can get indexation benefits:
