India exempts debt mutual funds from new tax for a short period

He also increased the long-term capital gains tax rate on debt-linked mutual funds to 20 percent from 10 percent.

Reuters| Updated: Jul 25, 2014, 15:29 PM IST

New Delhi: The government has decided to exempt earnings from investments in debt mutual funds on units sold between April 1 and July 10 this year, Finance Minister Arun Jaitley told lawmakers on Friday, bowing to pressure from retail investors.

In his maiden budget, Jaitley had proposed a tax on gains from investments in non-equity mutual fund schemes. He also increased the long-term capital gains tax rate on debt-linked mutual funds to 20 percent from 10 percent.

The mutual fund industry protested against the proposed tax changes.