Here's how the changes in Finance Bill 2023 will impact debt mutual funds

Mutual fund investments where not more than 35 percent is invested in equity shares of Indian companies will now be deemed to be short-term capital gains. This applies to investments made on or after April 1, 2023 and will impact flows into debt funds, gold funds, and international funds.

CNBC-TV18 has been speaking to experts and all of them agreed that this has just come as a body blow to the debt category of mutual funds.

Mohit Gang, CEO & Co-Founder of Moneyfront said the existing flow will continue to enjoy indexation benefit and continues to enjoy the previous tax regime. He said, “The retail HNI money put together is roughly around 30-35 percent odd of this non-equity AUM, which will hugely get impacted. The new flow which will come in that is what will get impacted.”