Why Debt Funds Are Still Better

Changes in the recently passed Finance Bill in March 2023 may have gotten everyone thinking about what is going to happen next to my portfolio and investments especially in debt mutual fund space. Apart from debt funds, another popular instrument - Market Linked Debentures - also lost its tax arbitrage that it offered investors over the years. Consequently, the noise that followed this development among the finance circles was no surprise. Now that the dust has seemingly settled, let us consider in real terms how an investor will be impacted by these changes. Over the years, debt funds offered indexation benefits if an investment was held for more than three years. This was not the only reason why debt funds were popular. What investors forgot in the noise is that one of the foremost benefit of debt funds is the easy liquidity aspect it provides. And this benefit is available even after...