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Arbitrage fund vs fixed deposit

Arbitrage funds score over fixed deposits because of the favourbale taxation

I want to invest approximately ₹15 lakh to earn a decent monthly or quarterly income. I read about arbitrage funds on your site and other mediums and they seem a good avenue (better returns and tax efficient) than fixed deposits. Can you please guide me and suggest a few funds?
- Ketan

Arbitrage funds score over fixed deposits because of the favourbale taxation. Arbitrage funds are treated as equity funds for taxation and investments in them held over a year qualify for long-term capital gains tax, which is nil at the moment. Investments sold before a year would attract short-term capital gains tax of 15 per cent. However, arbitrage funds do not offer assured returns like fixed deposits. The returns would depend on the arbitrage opportunities between the cash and the derivatives markets.

Here is a list of top-rated arbitrage schemes.

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