The Economic Times

Want to move from gold and equity to debt? How income tax deferral in debt mutual fund may work in favour of long-term investors

Indian investors seeking stability and returns beyond fixed deposits have options. Debt mutual funds offer potential for better post-tax returns through tax deferral and compounding. While fixed deposits are familiar, their annual taxation erodes compounding power. Debt funds, taxed only at redemption, can be more efficient. Investors should consider their tax bracket and investment duration when choosing between these options.