Mutual Funds Updates

The Union Budget 2024 has introduced changes that make Gold Exchange-Traded Funds (ETFs) more attractive compared to Gold Mutual Funds. Under the new tax regime, profits from Gold ETFs held for over a year will be taxed at a long-term capital gains rate of 12.5%. Previously, gains were taxed according to individual slab rates regardless of the holding period. This change positions Gold ETFs as a more tax-efficient investment option starting April 1, 2025. Gold ETFs, such as Nippon India ETF Gold BeES (Gold BeES), are passive mutual funds that invest in standard gold bullion of 99.5% purity and closely track domestic gold prices. In contrast, Gold Mutual Funds are fund-of-funds (FoFs) that invest primarily in gold ETFs. Currently, there are 17 Gold ETFs available, with Gold BeES standing out due to its high liquidity and low tracking error. Customs Duty Reduction Another significant development from the Budget is the reduction in customs duty on gold and silver from 10% to 6%, and the c...

In the Union Budget 2024, the Indian government has reinforced its commitment to Mission Viksit Bharat, aiming to lay a strong foundation for India's development goals by 2047. Prime Minister Narendra Modi emphasized that this Budget will guide the government's agenda for the next five years and support the vision of a developed India. Fiscal Performance and Projections The actual fiscal deficit for 2023-24 was recorded at 5.6% of GDP, slightly better than the 5.8% anticipated in the interim Budget earlier in the year. This lower-than-expected deficit has allowed the government to reduce its borrowing for the current fiscal year, bringing the deficit projection down to 4.9%. Tax Revenue and Reforms Tax collections have exceeded expectations, with gross collections rising by 13.5% of nominal GDP, largely driven by a 9.5% increase in personal income taxes. The government has further expanded tax slabs by Rs 1 lakh to benefit investors, continuing its trend of reducing exemptions ...