Mutual fund scheme mergers won’t put extra tax burden on investors

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Capital gains on sale of units due to merger of schemes

As consolidation of schemes takes place, there is good news for investors. "Merger or consolidation of schemes in order to re-categorise existing schemes as per Sebi orders would not attract any capital gains tax, either short-term or long-term, in the hands of the investor. 

The government had already amended section 47 of the Income Tax Act to exempt the capital gains arising from the merger or consolidation of mutual fund schemes. with effect from April 1, 2016..

What this means is that when a scheme is merged, you will not be taxed on the long and short term gains you will make whenever you will sell the units.



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