Balanced funds post LTCG

With LTCG being introduced in the latest budget as I wrote in my last post arbitrage funds have become history.

Let us see about how this impacts balanced funds.

Balanced funds as you are aware has a maximum limit to the % of equity that it can have and the fund manager does keep on balancing the debt to equity ratio depending on what's happening in the market.

While there potentially is a large churn in the portfolio since the equity component also includes arbitrage positions it is mostly short term capital gains.

Now as the long term capital gain comes in ... The overall impact is similar to that of the regular mutual fund. Ie the 10% when you sell the balanced fund.

While writing this post some of the concepts got clearer in my head. One needs to reason as to what the logic is and as my father always said teaching someone brings more clarity to you .. that part of the truth finally seems to have hit me once again

Learn the impacts of these changes to your tax ecosystem on your investments.. that's simplefinancialsense