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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

Stocks, stock, stock market, mutual fund, investor, retail investor, investment, investment banker, MF, BSE, NSE
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Experts believe debt fund managers can minimise the impact on flows by improving performances of active schemes and cutting down costs of passive ones

Abhishek Kumar Mumbai
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

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First Published: Mar 24 2023 | 8:58 PM IST

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