Tata Mf Debt Fund Gets Sebi Nod

The Securities and Exchange Board of India (Sebi) has given the go-ahead to Tata Mutual Fund for its debt fund, Tata Income Fund (TIF). TIF is scheduled to be launched on March 19, 1997. Tata MF is also planning to make Tata Young Citizens Fund open-ended and is seeking Sebi approval for the same.

The fund proposes to give a 15 per cent assured return payable half-yearly in October and April and guaranteed by Tata Asset Management. It will also have a repurchase option after one year at the issue price after deducting the initial issue expenses.

TIF would be an open-ended fund which will open for sale and repurchase after six months. The scheme would give the unitholders the benefit of section 80L of the Income tax Act. It also offers 100 per cent capital gains exemption under Section 54EA and 54EB on long-term capital gains realised by the investors after October 1, 1996. Such investors can invest up to March 1997 and need not pay long-term capital gains tax. Under Section 54EA, if the entire net sales proceeds is invested in the scheme with a lock-in period of three years and in case of Section 54EB, investment of only capital gains amount (excluding the original investment amount) invested in the scheme for a seven year lock-in period, the investor will get a 100 per cent exemption from the payment of long-term capital gains tax.

 

The investment objective of the scheme will be to invest up to 95 per cent of the funds in debentures and bonds and up to 5 per cent in money market instruments for liquidity purposes. After a period of six months, the scheme will announce the weekly NAV as per the Sebi guidelines.