Journal Press India^®

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This research paper conducts a comparative analysis of income tax benefits on mutual fund investments under India’s old tax structure and new tax regime. It examines the impact of tax deductions, particularly under Section 80C and for Equity-Linked Savings Schemes (ELSS), versus the effects of lower tax slab rates in the new regime on investor behaviour and post-tax returns. The study finds that tax planning remains a significant driver in investment decisions. The old regime incentivized investments through deductions and favourable capital gains treatment, while the new regime’s simplified structure may reduce the attractiveness of mutual funds for some investors. The paper concludes with policy implications for investors, asset management companies, and regulators, emphasizing the need for adaptive strategies, enhanced investor education, and continuous monitoring of the evolving tax landscape to ensure effective wealth creation through mutual funds.

Keywords

Mutual funds; Income tax; Old regime; New regime; Investor behaviour; Tax planning

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