How-to bonus units MF corporate action

How to handle mutual fund bonus units

From WebNotes, a public knowledge base. Last updated . Reading time ~3 min.

MF bonus units are similar to stock splits: total holding value unchanged, just more units at lower NAV. Tax-neutral at issue; Section 94(8) prevents bonus-stripping arbitrage.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC. No affiliate commission is earned.

Step-by-step procedure

See the procedure infobox above for the five steps.

See also

External references

References

  1. Income Tax Act, 1961, Sections 94(8), 112A.
  2. SEBI (Mutual Funds) Regulations, 1996.
  3. AMFI Best Practice Guidelines.

Related articles

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed
Conflicts of interest
WebNotes is independent. No relationship with any broker, registrar or bank named in this article.