Invest On Or Before 31st March 2021 To Get 4 Indexation Benefit

Debt investments are recognized for their tax efficiency vis-à-vis traditional investment instruments. Qualifying as a tax-savvy structure on passing of financial year, you can get 4 Indexation benefits by 1 timely debt fund investment. Here’s all you need to know & do for the same:

1. Long term capital gains (holding period of over 3 years) from debt mutual fund schemes are taxed at 20% plus applicable surcharge and cess with the benefit of indexation.
2. Government notifies Cost Inflation Index (CII) for each financial year taking into consideration the prevailing inflation levels
3. The cost of purchase for computation for tax is adjusted for inflation using CII, thereby reducing the capital gains from tax perspective.
4. A debt mutual fund investment near the end of financial year (March 2021) with holding period of >3 years (April 2024) makes you eligible for CII application for >5 financial years, resulting in 4 indexation benefit.

You can avail 4-indexation benefit, if you invest in the required manner on or before March 31,2021 and redeem during FY25

Note: Above table is an illustration. Investors to be aware that fiscal rules/tax laws may change and there’s no guarantee that current tax positions may continue indefinitely.

You May Consider Opting For Debt Mutual Fund Schemes Right About Now.