*Note - This is regarding the Long Term Capital Gain taxation perspective as per the new finance bill. Kindly consult your financial advisor for any tax related information applicable to your investment. Below that you could add a link which says: Know more about this development leading to this page:
As per the latest news, the Finance Ministry has made an amendment to the Finance Bill and done away with the long-term capital gain tax (LTCG) benefit that debt mutual fund investors currently enjoy (The Bill has been passed in Lok Sabha and should be presented in the Rajya Sabha soon). According to the proposed amendments, debt funds having not more than 35% invested in equity shares would be taxed at the income tax slab level and treated as short term capital gain.
In other words, Gains on investments made in such Schemes after April 1,2023 may be taxed at the same rate as that applicable for short term capital gains, irrespective of the Holding period. This rate is currently equivalent to the marginal tax rate payable by each individual investor.
Given that, all investments undertaken before March 31,2023 will continue to enjoy LTCG and Indexation benefits, we suggest you undertake your investment in Parag Parikh Conservative Hybrid Fund (PPCHF) such that the allotment process is completed by March 31, 2023... which in turn will lead you being able to avail of the current regime of 20% capital gains tax after availing of the indexation benefit.
Existing Investments in PPCHF should also be retained as long as possible as they will continue to enjoy the current, concessional LTCG tax rate.
Please Note: The proposal will need to be approved by both Houses of Parliament for it to become law.
Parag Parikh Conservative Hybrid Fund is an open-ended hybrid scheme investing predominantly in debt instruments.
To generate regular income through investments predominantly in debt and money market instruments. The Scheme also seeks to generate long term capital appreciation from the portion of equity investments under the scheme.
However, there is no assurance or guarantee that the investment objective of the Scheme will be realized.
The key advantage of PPCHF is:
It is a credible and tax-efficient alternative to certain fixed income instruments (like bank fixed deposits), offering the scope to earn income along with the prospect of growth in Net Asset Value (NAV) when held for a reasonably long period.
Key Features of our Investment Strategy:
Fixed Income Investments:
A relatively wide mandate permits us to include both, ‘accrual’ and ‘duration’ related instruments in our portfolio. These include Sovereign, State Government, PSU and corporate securities across all maturities.
Preference for stocks with strong cash flows (higher dividend payout/buybacks)
Focus on choosing stocks possessing a 'margin-of-safety'
Avail of 'special situations' whenever they arise.
REITs & InvITs:
Strive to fight inflation via annual rental increments.
Possibility of growth in investment value due to increase in Net Asset Value (NAV)
Note : Please refer to the Scheme Information Document (SID) for more details on Asset Allocation of Scheme.
Parag Parikh Conservative Hybrid Fund
This product is suitable for investors who are seeking*
To generate regular income through investments predominantly in debt and money market instruments.
Long term capital appreciation from the portion of equity investments under the scheme.
*Investors should consult their financial advisers if in doubt about whether the product is suitable