Last-minute dash for debt mutual funds before tax advantage vanishes

Target maturity funds, longer-duration schemes see high demand

Debt mutual fund (MF) schemes registered a surge in inflows in the final days of March before the new taxation rule kicked in on April 1. Investors rushed to lock in yields in mid- to longer-duration debt funds ahead of a change in the taxation structure that will see indexation benefits for the calculation of long-term capital gains (LTCG) on debt MFs not available for investments made on or after April 1.

“Inflows were a lot higher in the last few days as investors wanted to benefit from the erstwhile taxation regime,” said Radhika Gupta, managing director and chief executive