NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Which of the following is treated as an equity-oriented fund for tax purposes in India?
A scheme that invests at least 65% of its total proceeds in equity shares of domestic companies is treated as equity-oriented for tax. Debt schemes, low-equity schemes and gold ETFs fail this test and receive different tax treatment.
- AA scheme investing at least 65% of its total proceeds in equity shares of domestic companiesCorrect
- BA scheme investing at least 65% in debt securities
- CA scheme investing 40% in domestic equity
- DA gold ETF
Explanation
An equity-oriented fund is one investing a minimum of 65% of its total proceeds in equity shares of domestic companies (with specified conditions for fund of funds). Debt-heavy schemes, 40% equity schemes and gold ETFs do not meet this test.
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