Pure debt schemes no longer enjoy indexation benefits after the govt scrapped it in Budget 2023-24, but investments in hybrid funds that have an equity allocation between 35% and 65% are still eligible for it.
Indexation reduces an investor’s tax outgo in a year by adjusting inflation with the asset’s acquisition cost. Some schemes in the balanced hybrid, multi asset and dynamic asset allocation category still retain indexation benefits.
AgenciesInvestors who buy these products before March 31 and hold such schemes till April 1, 2027, will end up paying 20% long-term capital gains tax with indexation benefits and will get an additional year’s benefit.
“Investors with low risk appetite looking to move some money from bank deposits, can consider such a schemes, which will increase their post- tax returns,” says Viral Bhatt, founder, Money Mantra.
