However, as per the proposed changes in the Finance Bill 2023, only those debt mutual funds will lose these benefits where equity investment in such schemes is less than 35 per cent.
The move will be detrimental to the broader agenda of corporate bond market development, reminding that mutual funds were big subscribers to papers issued by companies like Nabard
Debt mutual funds are stripped of the long-term tax benefit if they invest less than 35 per cent of their assets in equities. Such mutual funds will attract short term capital gains tax.