SEBI debt MF taxation amendment FY24 (India)

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

The debt mutual fund taxation amendment of FY24 refers to the changes introduced by the Finance Act, 2023 (Union Budget 2023 to 24, enacted in March 2023) that eliminated the long-term capital gains (LTCG) benefit for debt mutual fund schemes in India with effect from 1 April 2023. Prior to this change, debt mutual fund investments held for more than three years qualified for LTCG tax at 20% with indexation benefit, a preferential rate that made debt funds significantly more tax-efficient than fixed deposits for investors in the 30% tax bracket. The 2023 amendment aligned the tax treatment of debt fund gains with that of interest income: gains are now taxed as per the investor’s applicable income tax slab rate, regardless of holding period. The amendment affected the SEBI (Mutual Funds) Regulations, 1996 indirectly through required updates to scheme disclosures, and was noted prominently in all Scheme Information Documents (SIDs) , SAIs , and KIMs . The SEBI Investment Management Department required AMCs to update their documents immediately.

LTCG Debt Fund on WebNotes

SEBI debt MF taxation amendment FY24 (India)