Finance Bill 2023: Debt MF tax changes to hit fund houses; AMC stocks fall

Industry expects inflows shrinking in the medium to long-horizon debt funds

The government’s move to do away with tax benefits enjoyed by debt mutual funds (MFs) vis-a-vis bank fixed deposits (FDs) has come as a surprise for the Rs 40-trillion asset management industry.

The last-minute change in taxation triggered a selloff in AMC shares, with the debt fund market leader HDFC AMC dropping over 4 per cent. Shares of UTI AMC and Aditya Birla Sun Life AMC also dropped over 4 per cent each.

“The move is disruptive for us. In the case of debt schemes, indexation benefit has been one of our key selling points. The change will also prove