Taxation of Fund of Funds (FoF)
Tax classification depends on allocation criteria:
Equity-oriented FoFs taxed at 15% for STCG and 10% for LTCG exceeding Rs 1,00,000.
Other FoFs taxed at slab rates or 20% with indexation benefit if purchased after April 1, 2023.
Types of Fund of Funds (FoF)
Asset Allocation Funds: Diversified approach across equities, debt, and commodities like gold.
Gold Funds: Invest in gold securities, either through gold mutual funds or trading companies.