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Thursday, May 24, 2018

Dynamic Equity Funds Tax Advantages

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What is the tax treatment of dynamic equity funds?

A big advantage of these funds is that they are structured in such a way that they are taxed as equity funds for investors. Most funds, when they lower their exposure to equities, ensure that equity plus arbitrage component of the scheme is at least 65% of the corpus, which helps it qualify for equity taxation. When the fund qualifies for equity taxation, investors who hold the fund for one year need to pay zero long-term capital gains tax, making the investments tax free.


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