What is the tax treatment on fund of fund schemes?
— Vikas Yadav
The tax treatment on a fund of fund (FoF) scheme is similar to those of debt funds, because all FoFs are treated as debt funds as far as tax treatment is concerned. The short-term capital gain on debt funds is added to the taxable income of an individual and is taxed as per the applicable tax slab. The long-term capital gain is taxed at 11.33 per cent without indexation or 22.66 per cent with indexation.