New Tax Rules for Mutual Funds

Top 10 Updates

• 1. RBI’s FY25 dividend to center expexted to top Rs. 2.5 lakh crore Economists believe record high dollar sales by the Reserve Bank of India (RBI) to protect the rupee's exchange rate and interest earned from large scale liquidity operations have boosted the prospects of a bumper payout, which one overseas banking group believes could be as high as Rs 3.5 lakh crore.
• 2. The Income Tax Department has introduced the 'ePay Tax' feature on its online portalThis initiative seeks to remove traditional obstacles such as long queues and complicated forms.By providing a direct digital method, the department promotes timely compliance and makes tax administration more accessible to citizens.
• 3. The EPFO has simplified the process of transferring PF accounts by removing the need for employer approval
• This change is benefiting over 1.25 crore members and enabling the faster transfer of around Rs. 90,000 crore annually.
• Additionally, EPFO has introduced bulk Universal Account Number generation to ensure quicker crediting of funds
• 4. Near 10% boost takes GST kitty to Rs. 22 lakh crore
• GST collection in March rose nearly 10% to ₹1.96 lakh crore, driven by economic stability and strong tax compliance.
• The fiscal year's gross collection increased to ₹22.1 lakh crore. April collections are expected to be higher, continuing the trend of revenue growth and better compliance
• 5. The government is expanding its tax base by introducing a 1% Tax Collected at Source (TCS) on luxury items priced above Rs. 10 lakh
• This measure aims to address under-reported income and monitor highvalue transactions in sectors such as watches, handbags, and art.
• The initiative increases scrutiny on both buyers and sellers, tackling issues related to tax evasion and smuggled goods
• 6. India’s private capex likely to grow 66% from FY22 to FY25
• Private sector capital expenditure is projected to surge by 66.3% to Rs 6.6 lakh crore in FY25, marking a peak between FY22 and FY26. Corporate confidence remains high with manufacturing leading investments at 43.8%.
• 7. Net direct tax collections rise 13.57% year-on-year for FY25
• India's direct tax collections demonstrated substantial growth, climbing 15.59% to reach Rs 27.02 lakh crore in FY24-25, driven by increased corporate and non-corporate tax revenues. A significant surge in securities transaction tax (STT) receipts also contributed to this rise. After accounting for refunds, net direct tax collection stood at Rs 22.26 lakh crore, marking a 13.57% increase.
• 8. No fee to be charged for updation of nominees for PPF accounts:FM
• This change comes as part of the Government Savings Promotion General Rules, 2018, which have now been updated via Gazette Notification April 2,2025
• 9. India inks ₹64,000 cr deal with France to buy 26 Rafale jets for Indian Navy
• 10. India bags 22% of global IPO share, rakes in $2.8-bn in Q1 2025

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New Tax Rules for Mutual Funds

• In the last few budgets, there has been a lot of overhauling regarding taxation of various Mutual fund categories. Here is our attempt to summarize and put in simple words, MF taxation applicable for investments done on or after 1.4.2025
• 1. Categories: So now basically there are 4 categories:
• - EQUITY– This category now includes Equity, Equity Index, Equity ETFs, Equity FOFs, BAF, Equity Savings, Arbitrage, Aggressive Hybrid (all funds where 65% or more of assets are in domestic equity shares and related instruments
• - DEBT – Schemes having 65% or more of the investment in SEBI regulated Debt and Money Market Instruments
• - HYBRID – Schemes having more than 35% and less than 65% in SEBI regulated Debt and Money Market Instruments
• - OTHERS – Gold ETFs, Silver ETFs, FOFs, Multi Asset Allocation,International FOFs (funds with 35% or less exposure in Equity and related
• 2. Holding Period and Taxation:
• - EQUITY - STCG – Upto 12 months – Tax @ 20%
• - EQUITY - LTCG – Above 12 months – Tax @ 12.5%
• - DEBT - Any period of holding – Tax @ Slab rate
• - HYRBID - STCG – Upto 24 months – Tax @ Slab rate
• - HYRBID - LTCG – Above 24 months – Tax @ 12.5%
• - OTHERs - STCG – Upto 24 months – Tax @ Slab rate
• - OTHERs - LTCG – Above 24 months – Tax @ 12.5%
• Please note that the tax rate of 12.5% is applicable for gains above Rs 1.25 lakhs per FY for all MFs and Shares falling in this category

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