Why debt funds may still score over bank FDs and bonds despite tax parity

Experts feel debt MFs will be more relevant in a falling interest scenario and work well for those who aren't sure about their investment horizon

Investors who held debt mutual funds for more than three years were until now taxed at 20 per cent with indexation benefit. From April 1, their capital gains will be taxed at the slab rate. While this is a major blow to investors in this space, experts say debt funds will continue to be relevant in many scenarios.

“Now debt mutual funds, bank fixed deposits (FDs) and bonds have all been brought on a par in terms of taxation. Investors will henceforth compare these products on merit and choose the one they find most suitable at a given point,” says