Aggressive hybrid mutual fund

Tue, 12 May 2026 00:00:00 +0000

An aggressive hybrid mutual fund in India is an open-ended hybrid scheme that must invest between 65% and 80% of its total assets in equity and equity-related instruments and between 20% and 35% in debt instruments, under SEBI ’s October 2017 scheme categorisation circular. This category corresponds to what was historically marketed as “balanced funds” in India before SEBI’s rationalisation. The equity allocation of 65% to 80% qualifies aggressive hybrid funds for equity-oriented taxation, making them more tax-efficient than purely debt-oriented or conservative hybrid funds. Each AMC may offer only one aggressive hybrid fund.

Taxation of hybrid mutual funds in India

Tue, 12 May 2026 00:00:00 +0000

Taxation of hybrid mutual funds in India is determined primarily by the equity allocation of the fund, which places it into one of three tax buckets: equity-oriented (more than 65% in domestic equity), specified mutual fund (35% or less in domestic equity), or a residual intermediate category that existed briefly before the Finance Act 2023 reforms. Hybrid funds span the spectrum from aggressive hybrid funds (65-80% equity) to conservative hybrid funds (10-25% equity), and their tax treatment tracks the actual allocation rather than the category label. With the Finance Act 2023 eliminating the LTCG with indexation benefit for funds below the 65% equity threshold, and the Finance Act 2024 revising STCG and LTCG rates on equity-oriented funds, hybrid fund investors must pay particular attention to the equity allocation at the time of investment and at the time of redemption.

Balanced Fund on WebNotes

Aggressive hybrid mutual fund

Taxation of hybrid mutual funds in India