Published Paper Details:

This study investigates the taxation structure of mutual funds and derivative products in India, with a particular emphasis on HDFC Asset Management Company (HDFC AMC). The study examines the tax consequences for various investor groups, such as retail investors, high-net-worth individuals (HNIs), and institutional investors, and assesses how taxes effects investment decisions and portfolio management strategies. The Income Tax Act of 1961 provides varied tax treatment for equity, debt, and hybrid mutual funds, as well as derivative instruments such as futures, options, and swaps. The study uses a mixed-method approach, which includes a review of relevant literature, portfolio analysis, and scenario-based tax computations, to investigate the effectiveness of tax planning and the impact of tax legislation on HDFC AMC's mutual fund products. Findings reveal that equity mutual funds are generally more tax-efficient due to favorable long-term capital gains (LTCG) tax rates and exemptions, while derivatives are subject to higher tax volatility. Additionally, the abolition of the Dividend Distribution Tax (DDT) has shifted the tax burden to individual investors, affecting their overall returns. The study also compares India's tax regime to international practices in markets like the US and UK, where tax rates vary by income level and investment duration.