What if you could diversify like the role model in different asset classes across India and the globe and pay no Taxes.

Enter Multi Asset Allocation Funds

However, most investors miss this small detail in MAAF.
This Could help you to save Taxes…… Here’s How.
Not all Multi Asset Allocation Funds (MAAF’s) are taxed the same and are truly diversified.

There are two types of MAAF’s

1. Equity Oriented – > 65% In Indian Equities
2. Non-Equity - < 65% In Indian Equities

Above difference changes how your gains are taxed.

Equity MAAF’s Vs Non-Equity MAAF’s
- Tax Treatment

Equity Oriented MAAF’s
STCG (< 12 months) = 20 % Tax
LTCG (> 12 months) = 12.5% Tax (1.25 Lakh Exemption)

Non-Equity MAAF’s
STCG (< 24 Months) = Tax as per slab (Can be zero if income ≤ 12 L)
LTCG (> 24 Months) = 12.5%

The sweet spot is for middle-income investors
The Sweet Spot - (₹ 4 – ₹ 16L)

Middle income investors stand to gain the most Income.≤ 12 L – STCG in non-Equity MAAF’s can be zero tax.
( Section 87A Rebate, However, rebate is not applicable for STCG in Equity MAAF).
Income ₹ 12 – ₹ 16 L – Save 5 % Tax on STCG compared to Equity MAAF’s.

Non-Equity MAAF’s

Smarter Diversification
(More allocation available to debt-gold and global assets)

Smarter Taxation
( Tax savings based on your income slab)

Its Not just what you earn, its what you get to keep.

Blog by Mr. Santosh G Akerkar for Educational and Knowledge purposes only.