These mutual funds select bonds/debt for investment such that the average maturity (remaining) period for the portfolio is between 4 to 7 years. Longer duration funds may provide higher returns but are more sensitive to interest rate changes.
These are ideal for investors with a long term investment horizon.
The minimum mutual fund investment varies from scheme to scheme. It could range between Rs.100/ – to Rs.5,000/ -.
> If an investor has made an investment in a debt mutual fund and withdraws the amount before 3 years of investment, Short Term Capital Gains Tax would be levied, as per the income tax slab of the investor.
> If an investor withdraws the investment including capital gains post 3 years of investment, 20% Long Term Capital Gains Tax of 20% is levied, with the benefit of indexation.