by Mr. Srikanth Meenakshi, FundsIndia.com
Balanced
mutual funds (MFs) are equity-oriented
hybrid mutual funds. They invest in both the equity & debt markets, but
invest more in the former (hence the equity-oriented).
From
a income taxation perspective, funds that invest at least 65% in
domestic stocks qualify for treatment as equity funds (capital gains after 1
year of holding are tax exempt).
 |
| Srikanth Meenakshi, FundsIndia.com |
Mutaual
fund managers of balanced funds always maintain at least 65 % of their
investments in domestic stocks for this specific purpose. They are always
treated on par with equity funds for taxation purposes.
So,
short-term gains (holding period of less than one year) are taxed at 15 % (plus
surcharge & cess bringing it up to 17 %) and long-term gains (more than a
year) are income tax-exempt.
About Srikanth Meenakshi
Srikanth Meenakshi
Founder and Director at FundsIndia.com
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