Tax changes in mutual funds: How to manage your investments now

Mutual fund tax rules have changed subsequent to when this article was written. Please refer to this article for updated tax rules.

Changes in tax rules at the end of a financial year is not something that you routinely expect. And not when it is a sweeping change on taxation in your mutual fund! In this article, we are going to discuss the recent tax changes in mutual funds in 4 parts:

Tax changes in mutual funds: How to manage your investments now

What is changing with mutual fund taxation?

The Government has decided to remove the long-term capital asset benefit for some mutual fund categories. They are:

  • All debt mutual funds including target maturity/index debt funds and ETFs
  • All gold funds and ETFs
  • All international funds
  • All conservative hybrid funds in their current form
  • All Fund of funds, except those that invest only in equity ETFs
  • Any other fund category/scheme with exposure of less than 35% in domestic equity.

What the change is: There will be no distinction between long term and short-term holding period for the above categories of funds. The gain from these funds will be added to your total income and taxed at your income tax slab rate. This new law is applicable for investments made after April 1, 2023. 

What the impact is: The impact of this tax change, for investments in the categories mentioned above, is as follows:

  • Nothing changes for existing investments and investments made before March 31, 2023. Their taxation remains the same as it is now, whenever you sell them. That means, holding more than 3 years qualifies as long term capital gains (LTCG) and you will get indexation benefits with a tax rate of 20%. There is thus no impact for any investment made.
  • Nothing – in practice – changes for future investments where your planned investment timeframe is less than 3 years. You do not enjoy LTCG benefit for less than 3 years holding at present and you will not have it from April 1, 2023 either. 
  • For investments made from April 1st 2023 and onwards, your tax incidence will go up on investments in any of the categories mentioned above.  For these investments, even if your holding period is over 3 years, you will get no indexation benefits.

The taxman has not altered the other categories of funds. They would be as follows: 

  • Where the equity allocation is between 35-65% – for any category of funds, the existing tax rules on will continue to apply. That is, short-term capital gains on holding period of less than 3 years will be taxed at your slab rate, and beyond will be taxed at 20% with indexation. The categories that fall into this set are primarily the hybrid – multi asset category. Some solution-oriented funds also fall into this bucket. Another category called balanced funds (there are no funds under this now) will also retain this taxation status if new funds are launched in this space.
  • Where the equity allocation is above 65% – here too, tax rules haven’t changed. Long term is holding for greater than 1 year, and capital gains here are taxed at 10% with the first Rs 100,000 of gain being tax-exempt. Short term capital gains are taxed at 15%.

Tax changes in mutual funds – outgo and management

The indexation benefit was lowering your tax outgo by increasing the cost of your investment, bringing it to inflation-adjusted value. That benefit is now gone. Additionally, the tax rate was set at 20%, regardless of your slab rate.

Now, the biggest fear of additional tax outgo comes from the fact that the capital gain (sale value less original cost) will be added to your total income and taxed at your slab rate. The impact of this can be quite low or very high depending on whether the capital gain is going to push you to the next slab rate or retain you in the same slab (discussed further down). 

First, let’s take up the additional tax outgo owing to the new tax rule. 

When you read in media reports that if you are in the 30% tax bracket, this capital gain too will be taxed at 30%, it seems like a lot of cash outgo! But in reality, it is not. 

The reason why it is mentioned so is simply because, in India, we are currently paying taxes on a marginal tax rate basis. The 30% tax rate for example, is for the additional rupee you earn after your income crosses a certain threshold. Your entire income is NOT taxed at 30%.

So, if you want to know your real outgo, be cognisant of the average tax you pay on your total income.  For example, if your total taxable income is Rs 12 lakh, your tax under the old regime is Rs 1,63,800. That brings your average tax rate (total tax divided by total taxable income) to 14.9%, although you fall under the highest tax slab of 30%. Therefore, understand that the additional tax outgo will not be always high unless your capital gain pushes you to the next slab level. 

Let us explain this with a simplified example. Assume the following:

  • Your total salary income after all deductions is Rs 9,50,000. 
  • You invest Rs 100,000 in a debt fund on April 1, 2023 and you sell it after 3 years. The debt fund returns 7.5% annually, bringing the sale value to Rs 124,230.
  • The cost inflation index is 6%. 

The LTCG with the indexation benefit works out to Rs 5,128. 

Without indexation (the latest change) the taxable LTCG is Rs 24, 230 which will be added to your income of Rs 9,50,000 under the old tax regime.

The tax incidence in the two cases would be as follows:

As you can see, the additional tax outgo for you due to removal of LTCG, compared with the old rule, will be Rs 3973 or 4% more. That is not an alarming increase!

The tax impact is heavy when the capital gain pushes you to a higher tax bracket. Continuing with the above example – assume the taxable income, returns & cost inflation index remains the same, but with the debt funds investment is Rs 10 lakh instead of Rs 1 lakh. Here, the numbers stack up as follows: 

In the above case, where you jump slabs (greater than Rs 10 lakh), the additional tax outgo from the new rule is Rs 27,391 or a whopping 23% higher outflow! 

Please note that these are merely illustrations. The quantum of your gain and the cost inflation indexation you will actually lose will all change the picture of the additional tax impact. But it is safe to conclude that within the same tax slab, your outgo will not be too painful. If you jump to a new slab, the increase can be heavy. This is true whether you choose the new or old tax regime and there can be no pattern to which is better.

Given below is an excel sheet for you to check what will be your total tax outgo both under the old and new tax regime, if you sell you debt funds. We also show you the tax outgo if you don't sell them and hold them, so that you know the additional tax out go.  

Your strategy to ensure that your tax outflow does not hurt you much can broadly be as follows:

  • You will need to plan your redemptions, especially for long-term goals, a bit more carefully to ensure your tax outgo is contained in a particular year. The dipstick test is to see if by adding your capital gain, you remain in the same slab or jump to the next slab. Phased redemptions will become necessary before major goals. 
  • Tax harvesting, by periodically booking profits and re-entering again right away, may become necessary to ensure your gains are not too high that can push you to higher tax slabs. This is less of a necessity for those already in the highest tax slab and more applicable for those in the lower and middle slabs. Since you do not get the indexation benefit (which boosts your cost), the only other option is to exit and re-enter at a higher cost, thereby inflating the cost for tax purpose for yourself.  For example, if you invested at Rs 5 NAV and sold at Rs 7, you get taxed on Rs 2. And when you re-enter at Rs 7 immediately, the cost for tax purpose is Rs 7. So, you have inflated your cost for future tax calculation, although your original investment was at Rs 5. 

Second, let’s take up the debate on the parity in taxation of fixed deposits and debt funds and whether FDs make more sense now. From merely a tax perspective (and not on other counts), we don’t think FDs are better off for the following reasons:

  1. With FDs, you lose tax every year, even when you hold a cumulative deposit as it is taxed on accrual. With mutual funds, you are taxed only on redemption. The time value of money, by delaying tax outflows, act in your favour. There is also no TDS with debt funds.
  2. Although some of the categories of funds have lost their long-term status, they are still considered capital gains. Which means the short-term capital gain can be set off against any short-term capital loss. This is not a benefit available with FD interest.
  3. Systematic withdrawal plan, even after the tax change, will remain beneficial because of the way it is taxed. For example, if you are deriving Rs 10,000 per month of interest income from your bank, the same is fully taxed. However, if you do a SWP of Rs 10,000 per month, then only the gain component is taxed. This could be very low in the initial years (higher principal) and slowly grow in later years. Even so, the entire withdrawal is not taxed. This gives SWP an advantage over interest income. Read more about how to use SWP here.

Besides the above tax reasons, the liquidity that debt funds provide is unmatched. Yes, like before, you can and should always look at FD options that offer attractive interest. We encourage you to use our Prime Deposits as part of your fixed income portfolio (discussed further in the next section). 

What should you do with your existing investments?

For the debt funds (or other funds that are impacted from the tax changes) that you are already invested in, continue holding. These investments do not come under the new rules and will continue to qualify for long-term capital gains and indexation benefits any time you redeem in the future. There is no action that you need to take for these.

If you have some amount to invest now and you want to take full advantage of the small window you have until the new rules kick in, you can invest this in debt funds that meet your requirements:

  • Add to your existing debt funds that form part of your portfolio. Given that these will still enjoy lower taxation, it will come in handy at the time you need to redeem to meet your requirement. This would be the ideal step to take if you are approaching debt funds from a goal-based or portfolio perspective, or you have no specific timeframe in mind.
  • Lock into target maturity funds that offer good yields, but only if you have a specific period in mind. Our recent article on this will be of help. While many of these funds are at attractive yields now, remember that at the time of maturity, the amount will be returned to you – you’ll have to reinvest it at that point if you do not have any expense to meet, and this reinvestment falls under the new tax rules. So, unless you have a clear requirement, stick to topping up your existing debt funds if you have a surplus now.

How to manage your fresh investments?

Before we discuss about where to invest in, we think you should avoid falling into pitfalls on poor investment decisions merely to save tax. In other words, tax should not be the primary driving factor for investments. Returns and safety must score first. Hence, let us first address the issue of what you should avoid, especially as agents and distributors are likely to sell you products that will appeal in terms of lower taxes. 

What to avoid

  • Avoid making asset allocation decisions based on taxes. By that we mean, don’t load up your portfolio with equity-based funds just because debt fund gains suffer tax. As explained earlier, the additional tax outgo is not always prohibitive. Debt has a role to play in your portfolio, to balance the equity risk. By going all-equity, you will be upping the volatility and risk in your portfolio. Debt does not need to come from debt funds alone; see further below for more.
  • Avoid loading up on hybrid funds. While hybrid funds are lower on equity risk, they are still equity based. They are not debt substitutes so do not consider them to be one in your portfolio. Even equity savings funds, which take the most hedging, deliver losses in 1-year periods more than 10% of the time. The average 3-year return for equity savings funds, rolled over 3 years, is at about 8.1%. While this is not a raw deal, it is important for you to know that even in the worst periods (like the last few years) gilt funds have delivered an average of 8.4% over the same period. Remember that interest rates have been low for the past few years and have weighed on debt fund returns while equity savings have been pulled up by high performance of equity. Hence when equity goes down, you cannot expect equity savings funds to provide the support that debt would. They can form part of shorter duration portfolios for their tax efficiency but there is a return penalty in the long term.

Balanced advantage funds manage higher returns averaging at 10.2% in the above period. But then, unhedged equity exposure, which drives returns, swings wildly between funds. Based on hedging strategy, they can be similar to aggressive hybrid funds with very high equity exposure. That again makes them poor debt substitutes. So, while you can increase allocation to these funds for the tax benefits, do not assume them to take over the role of debt in your portfolio. 

Arbitrage funds come the closest to debt in terms of low volatility and low risk, but returns here are very, very low. Arbitrage funds often return lesser than even liquid funds; it is only the equity taxation that make them favourable. So even if they do have short term usage due to their tax status, for longer periods, when compared against longer-term debt funds, returns even post tax at the highest rate would be above that of arbitrage funds. Overall, there is a high chance that you would be sold hybrid funds not fitting your risk profile or time frame. Please stay clear of such sales pitches. 

  • Stay cautious with insurance products: Many of you have asked whether money back, endowment and guaranteed income plans from insurance would become more attractive. On the last part first, most guaranteed income plans were meant to be HNI products with premium above Rs 5 lakh. Whether they will remain in vogue in the coming years is in question (and even if they do, getting a small income stream from these, when premium is lower than Rs 5 lakh may not even help you much anyway) as the latest Finance Bill brought the proceeds under taxation. On money back and endowment, while there are claims of high returns, the few products on which we have responded by way of queries from some of you in the past suggest that returns remain low. Yes, a target maturity fund with a 7.75% yield may deliver a net 6.5% on an average for a 20% tax bracket (average rate of tax at 15%). But please don’t forget that active debt funds such as corporate bond, banking & PSU debt or even gilt can deliver significantly higher returns when rates fall and can help you lock into those gains as well, since you can exit anytime. Hence, study the details of such insurance products by way of cost, lock-in, transparency and returns before making the plunge. 

Yes, it is possible that debt-oriented ULIP products with low costs may start competing in this space given the better tax structure. If they are transparent, provide disclosure and information required to assess, and have low cost, we will be open to exploring them. 

What to continue

Needless to say, nothing changes with your fresh investment strategy in equity and equity-oriented funds. For the ones where there is a change, read the following below:

  • Continue investing in international funds. These funds provide diversification in a portfolio and being equity, do have high return potential. The tax treatment alone is not reason enough to remove them from their portfolio. Low cost, passive US-based funds remain our choice. While direct stock investing through the LRS route is an option, given the tax collected at source on such remittance (at 20%), we think this route is not a desired one for a retail investor. 
  • Continue investing in gold funds. Gold should remain part of your long-term portfolio for the simple purpose of providing hedge when equity does not do well.  While physical gold and SGBs will score on tax henceforth, we think the liquidity offered by gold funds will remain a key reason to stay invested. If you find SGBs with liquidity, you can explore them. 
  • Continue with short-term debt funds for short term needs. With interest rates at a high, the short duration funds have seen a marked improvement in their yields. Short duration funds for example have seen their YTMs (yield to maturity) raise from 5.5% in April 2022 to 7.7% in February 2023. They may yet rise by a few basis points. If these are meant for your short-term needs, there is no need to give up on them. Yes, if you find fixed deposits for similar short tenures at such rates, there is no reason to shun them, if you don’t mind the tax on the interest accrued. 
  • Active debt funds may have an edge. We have thus far recommended target maturity funds (TMFs) on a hold-to-maturity basis given the current high yield and indexation benefit available. With the latter ceasing from April 1, we do think that the ability of active debt funds to generate superior capital appreciation opportunities will have to be pitched against just the high YTMs of TMFs. To this extent, we would recommend continuing and adding more to high quality active debt funds, in line with your time frame requirement from Prime Funds

Where else to invest in 

  1. Select NCDs and privately placed bonds: We do think that direct investing in bonds can be a way to supplement your debt fund investments (not replace them). With increasing avenues to invest in the listed debt space through various platforms, at PrimeInvestor, we will look at select opportunities to invest in these bonds. But please note that the interest pay-out on these remain taxable. Capital gains on such bonds are taxed as part of your income if sold within a year and are taxed as long-term capital gains at 10% (without indexation) if sold after a year. But please stay away from credit risk products in this space. The credit risk is worthwhile only if the return adequately compensates for it and such risk is still within investment grade for retail investors (AA-) or even HNIs (above BBB). At PrimeInvestor, while we have selectively given privately placed bond calls, we will look for opportunities with other bonds as well. 
  2. Deposits with attractive rates: Since the change brought about in bank deposit insurance in August 2021, we have advocated that for those in the low and middle tax bracket, deposits with attractive rates, even in smaller banks have begun to make sense from a  risk-reward perspective. Towards this we changed our Prime Deposits list to include small finance banks and NBFCs. We also added a Prime FD tool to provide you our confidence level  on the quality of the banks you invest in. 
  3. G-Secs/SDLs : For those of who can time entry and exit, investing in G-Secs is an option now that mutual funds will no longer offer superior tax benefit. For those looking to seek income, we have always advocated creating some income stream with SDLs and G-Secs and have recommended these over last year and earlier this year when the tenure and return were attractive. For both of these, it is best that you open a RBI Retail Direct account (with NDS-OM secondary market) online for free. 
  4. NPS: If you are in the high tax bracket, both Gilt and Corporate allocations of the NPS become a viable option for your debt portfolio for long-term retirement. Three factors work on its favour: one, 60% of your corpus on redemption enjoys tax free status. Two, it allows you to ability to switch between options and fund managers without tax impact. Three, it is an extremely low cost product and expense ratio eats little into returns. Use our NPS fund Manager Ranking tool to choose your allocation and fund manager. 

At PrimeInvestor, we are future ready. We not only look at clean and transparent products from a risk-return perspective but think beyond taxes and look at newer, emerging low-cost products that can help build wealth in a sustained manner, whatever be the direction of taxation.

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38 thoughts on “Tax changes in mutual funds: How to manage your investments now”

  1. Ganesan Rajagopal

    Most investment recommendations suggest avoiding hybrid funds like Equity Savings Funds or Balanced Advantage Funds as an alternative to debt funds without considering the big picture. When you look at these funds strictly as an alternative to debt funds, of course, it doesn’t make sense. However from an asset allocation perspective, say if I want to be 50-50 in debt and I was previously investing the debt portion in a debt fund, it totally makes sense to switch to a hybrid fund.

    The challenge is how do you maintain your target asset allocation if the equity vs debt is left to the fund manager discretion. That however was a problem with hybrid funds even earlier and if you trust the fund manager to make the right calls, an equity savings fund seems a reasonable alternative if you proportionately reduce your direct equity exposure.

  2. Won’t direct g-secs/sdl will have higher reinvestment risk than gsec/sdl based funds? If someone is in need of regular cashflows, they can do swp from the fund itself. One can change amount and frequency of swp as per his needs. Why to choose individual bonds? Please help!

    1. Bhavana Acharya

      Gilt funds will have duration risk, and many funds can be very low-returning in shorter-term periods. So you shouldn’t start SWPs from the fund immediately after investing and give it a few years minimum for the impact of duration and volatility to taper off – after this, yes, you can do an SWP from gilt funds. Investing in gilts directly would give you immediate cash flow and let you lock into yields. – thanks, Bhavana

  3. N M Rajugopal Shreedhar

    Hi, nice article-loved the presentation style. I thought Target Maturity Funds were close-ended, but VR says it’s open-ended– specifically , the recommended fund, Edelweiss NIFTY PSU Bond Plus SDL Apr 2026 50:50 Index Fund – could you please clarify ? Thanks and regards

    1. Thanks! All target maturity funds are open ended (only FMPs are closed ended). They just have a maturity date. Vidya

  4. Thanks for the timely update. What are your views on Equity Savings funds as an alternative, albeit not a like to like comparison. Given that most debt MFs are being invested with a 3 yr view due to the LTCG status, can one assume Eq savings with a 3 yr view could be an option ?

    Of course, MFs will likely ‘innovate’ and launch new products in the 36 to 65% corridor.

    1. We have mentioned about equity savings in the article. Please read. for 3-year plus there will be return penalty by choosing this option. Vidya

  5. CONGRATULATIONS ! very nice article.one question are 5 yr constant maturity funds available?

    1. No, there aren’t any such funds. Gilt funds will change maturity based on the rate cycle. – thanks, Bhavana

    2. Bhavana Acharya

      Sorry, to amend the earlier response – you do have 5-year gilt ETFs/FoFs. They are not constant maturity funds, but simply aim to mirror the 5-year G-Sec. But please note that these usually see low volumes and tracking error is hard to judge as index data is not easily available. You can explore these if you wish to. – thanks, Bhavana

  6. Won’t direct g-secs/sdl will have higher reinvestment risk than gsec/sdl based funds? If someone is in need of regular cashflows, they can do swp from the fund itself. One can change amount and frequency of swp as per his needs. Why to choose individual bonds? Please help!

  7. Hi,
    Thank you for the insights, very useful.

    I plan to invest lump sum before 31st March. I don’t have any timeframe in mind, but i don’t need them for at least for 3 to 5 years. In Recommendations for 3 to 5 years most are corporate bond funds.

    My question is should i invest all in corporate bond funds or split it between short/medium/long term funds?

    Thanks,
    Dinesh

    1. You can split between short duration and corporate bond funds, for that timeframe. Please check Prime Funds for our recommendations. – thanks, Bhavana

  8. Hello Team Primeinvestor,
    You have said short term capital gains can be set-off against ANY short term capital losses, can the short term capital gains of debt funds be set-off against the short term capital losses of equity funds.
    Thanks.

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  6. The recommendations provided by the RA as part of its Research Services may not be suitable to all categories of investors.
  7. The client should read all scheme and security related documents carefully before investing.
  8. Returns and performance figures mentioned in the research report represent past performance and should not be constituted to be future returns or guaranteed returns.

7. Conflict of interest

The RA shall adhere to the applicable regulations/ circulars/directions specified by SEBI from time to time in relation to disclosure and mitigation of any actual or potential conflict of interest. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

General disclosures: PrimeInvestor Financial Research Pvt Ltd (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200008653). PrimeInvestor Financial Research Pvt. Ltd., its employees, directors or agents, do not have any material adverse disciplinary history as on the date of publication of this report.

Restrictions on trading: To ensure no conflict of interest, the RA declares as follows:

  1. Personal trading activities of the individuals employed as research analysts shall be monitored, recorded and subject to a formal approval by the directors or compliance officer of PrimeInvestor Financial Research Private Limited.
  2. Research analysts employed by PrimeInvestor Financial Research Private Limited or their associates or relatives shall not:
    • Deal/ trade in stocks recommended/ tracked by the research analyst within 30 days before and five days after the publication of a research report;
    • Deal/ trade in securities that the research analyst reviews in a manner contrary to the given recommendation;
    • Purchase or receive securities of the issuer before the issuer's initial public offering, if the issuer is principally engaged in the same types of business as companies that the research analyst follows or recommends.

Disclosures with respect to Research and Recommendations Services:

  1. The RA or its directors or any of its officer/employee does not trade in securities which are subject matter of recommendation.
  2. The RA, or any of its officers, directors, employees, or subsidiaries have not received any compensation/ benefits whether monetary or in kind, from the AMC, company, government, bank or any other product manufacturer or third party, whose products are the subject of its Research Services or investment information.
  3. The Research Analysts who have prepared the research reports that form part of the Research Services (“Research Analyst”) certify that all of the views expressed in the research report accurately reflect their views about the subject company or subject security.
  4. The RA or directors or employees or Research Analyst certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
  5. The Research Analyst has not served as director, officer or employee in the subject company, AMC or insurance company of the mutual fund or insurance policy that is the subject of this report, or company whose bonds, NCDs, fixed deposits or other savings products that is the subject of this report.
  6. The Research Analyst or their relatives do not have any known direct or indirect material conflict of interest including long/short positions in the subject company.
  7. The Research Analyst may hold investments in the stocks, mutual fund schemes, bonds, fixed deposits, insurance policies, or other products that are the subject of the recommendations provided as part of the Research Services. The Research Analyst certifies that they will not act in a manner contrary to their views on these securities except in the event of significant news or event or change in personal financial circumstances and without formal approval from the directors of PrimeInvestor Financial Research Pvt. Ltd. or the compliance officer.
  8. There are no actual or potential conflicts of interest arising from any connection to or association with any issuer of products/ securities, including any material information or facts that might compromise its objectivity or independence in the carrying on of the Research Services. Such conflict of interest shall be disclosed to the client as and when they arise.
  9. The RA or its directors or its employee or its associates have not managed or co-managed the public offering of any company. The RA or its directors or its employee or its associates have not received any compensation for investment banking or merchant banking of brokerage services from the subject company. The RA or its directors or its employee or its associates have not received any compensation for products or services other than above from the subject company. The RA or its directors or its employee or its associates have not received any compensation or other benefits from the Subject Company or 3rd party in connection with the research report/ recommendation.
  10. The subject company of its research recommendations was not a client of the RA or its directors or its employee or its associates during twelve months preceding the date of recommendation services provided.
  11. The RA or its directors or its employee or its associates has not served as an officer, director or employee of the subject company. Research Analysts has not been engaged in market making activity of the subject company.

PrimeInvestor Financial Research Pvt. Ltd., its Associates, the Research Analysts or their relatives holds ownership of 1% or more, in respect of the said issuer company(ies)? – NO

8. Termination of service and refund of fees:

The RA may terminate or suspend rendering of Research Services to the client in the following circumstances:

  1. On account of suspension/cancellation of registration of RA by SEBI. In case of suspension of certificate of registration of the RA for more than 60 (sixty) days or cancellation of the RA registration, RA shall refund the fees, on a pro rata basis for the period from the effective date of cancellation/ suspension to end of the client’s subscription period.
  2. The RA voluntarily chooses to terminate its Research Service. In the event of such termination of the Research Service, the RA shall refund the fees, on a pro rata basis for the period from the date of such termination of research service to end of the client’s subscription period.

9. Grievance redressal and dispute resolution:

Any grievance related to:

  1. nonreceipt of research report, or
  2. missing pages or inability to download the entire report, or
  3. any other deficiency in the research services provided by RA

shall be escalated promptly by the client to the person/employee designated by RA, in this behalf as under:

Name: Bhavana Acharya
Designation: Director & Compliance Officer, PrimeInvestor Financial Research Pvt Ltd
Email: [email protected]

The RA shall be responsible to resolve grievances within 7 (seven) business working days or such timelines as may be specified by SEBI under the RA Regulations.

RA shall redress grievances of the client in a timely and transparent manner. Any dispute between the RA and his client may be resolved through arbitration or through any other modes or mechanism as specified by SEBI from time to time.

If the client is not satisfied with the response of the RA, he/she can lodge his/her grievances with SEBI at scores.sebi.gov.in. Alternatively, the client may also write to any of the offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office on Toll Free Helpline at 1800 22 7575 / 1800 266 7575

Details on grievances are available on the Website as follows: https://primeinvestor.in/ra-grievance/

10. Additional clauses:

Scope of the Research Service: The Research Services will be limited to providing independent research recommendation and shall not be involved in any advisory or portfolio allocation services. The Research Services are not meant to be tailor-made or customized solutions that specifically apply to each client based on his/her risk profile.

The RA never guarantees the returns on the recommendation provided. Investor shall take note that investment/trading in stocks/Index or other securities is always subject to market risk. Past performance is never a guarantee of same future results. The RA shall not be responsible for any loss to the Investors.

This service is not directed for access or use by anyone in a country, especially the USA, Canada or the European Union countries, where such use or access is unlawful or which may subject PrimeInvestor Financial Research Pvt Ltd or its affiliates to any registration or licensing requirement.

The Research Service, including recommendations, research reports, updates, and other information will be accessible through the RA’s website https://primeinvestor.in only. Such recommendations and updates will not be provided over phone calls.

Fees: Our current fee structure, the term and duration of our subscription for our Research Service, can be viewed on our website: https://primeinvestor.in/prime-pricing. Eligibility for any discounts is ascertained at the time the client subscribes. Any such discount and its tenure shall be at the discretion of the RA.

Subscription and access to content services fall under the purview of Goods and Services Tax (GST) as per the current indirect taxation policy, Government of India. Unless otherwise indicated, prices stated on our website are exclusive of applicable GST, any applicable value added tax (VAT) or other sales taxes. We are a business-to-consumer (B2C) service provider and we do not commit to provide any input tax credit on GST charged on subscription to our Research Service.

We may change the Subscription Fees and charges then in effect, or add new fees or charges which will take effect at the end of the client’s subscription period, by giving notice in advance and an opportunity to cancel renewal of the subscription.

Subscription Access & Renewal: Subscription to the Website commences immediately on the realisation of payment of the Subscription Fees. Subscriptions are set to be renewed automatically at the end of the subscription period.

Unless the client notifies us before the end of his/her subscription period, or the client cancels the auto-renewal mandate within the period specified by law, that the client does not wish to renew his/her subscription, the client’s subscription will renew for the period defined by the client’s subscription plan. We will charge the subscription using the same payment method that you previously used.

Although the client may notify to us his/her intention to his/her subscription, such notice will only take effect at the end of his/her then current subscription period, and he/she will not receive a refund other than as set out under Clause 8 in these Terms.

The client may notify us of his/her wish to cancel his/her subscription by sending an email to [email protected]. The client must provide at least 5 business days advance notice for this to be implemented.

Refunds: There can be no cancellation and refund of subscription fee paid once the subscription is active, other than as stated in Clause 8 of these Terms. If the client is entitled to a refund as specified under Clause 8 of these Terms, the RA will credit that refund to the card or other payment method used by the client to submit payment, unless it has expired - in which case the RA will contact the client to proceed with the refund. If we do issue a refund or credit due to circumstances outside the obligations specified under Clause 8, we are under no obligation to issue the same or a similar refund in the future.

General disclaimers: The recommendations made herein in the Research Services are expression of views and/or opinions and should not be deemed or construed to be advice for the purpose of purchase or sale of any security, nor a solicitation or offering on any investment/ trading opportunity on behalf of the company, AMC, insurance company, or issuer of security referred to herein.

The content and research reports generated by the RA does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities.

The information/ opinion/ views mentioned in research reports or by the RA are not meant to serve as a professional guide to the client or recipients of this Report. The research report, recommendation, or any other content published by the RA do not assure or guarantee any minimum or fixed returns to the client or recipients of the reports/ recommendations/ content.

Use of this information is at the client’s own risk. The client must make his/ her own investment decisions based on his/her specific investment objective and financial position and using such independent advisors as he/she believes necessary. The services rendered by the RA are on a best-effort basis. All information in the content or research report of the RA is provided on an as is basis. Information is believed to be reliable but the RA does not warrant its completeness or accuracy and expressly disclaim all warranties and conditions of any kind, whether express or implied.

While due care has been taken to ensure that the disclosures, information, and opinions given are fair and reasonable, PrimeInvestor Financial Research Pvt Ltd and/or none of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information/ opinions/ views contained in the research report and recommendations that form part of the Research Service, and/or mails, social media or notifications issued by PrimeInvestor Financial Research Pvt Ltd or any other agency appointed/authorised by PrimeInvestor Financial Research Pvt Ltd. Returns and performance figures mentioned in the research report represent past performance and should not be constituted to be future returns or guaranteed returns.

Any agreements, transactions or other arrangements made between the client and any third party named on (or linked to from) the Website are at your own responsibility and entered into at your own risk. Any information that you receive via the Website, whether or not it is classified as “real time”, may have stopped being current by the time it reaches you. Market price information may be rounded up/down and therefore may not be entirely accurate.

The purpose of these disclosures is to provide essential information about the Research Services in a manner to assist and enable the prospective client/client in making an informed decision for engaging in Research Services before onboarding.

History, present business and background: PrimeInvestor Financial Research Private Limited is registered with SEBI as Research Analyst with registration no. INH200008653. The Research Analyst got its registration on August 19, 2021 and is engaged in offering research and recommendation services.

Disciplinary history: There are no pending material litigations or legal proceedings against the Research Analyst. As on date, no penalties / directions have been issued by SEBI under the SEBI Act or Regulations made thereunder against the Research Analyst relating to Research Analyst services.

Details of the RA's associates: No associates.

Usage of Website Content: This Website is controlled and operated by the RA. All material, including research reports, recommendations, portfolios, ratings, lists of financial products, illustrations, statements, opinions, views, photographs, products, images, artwork, designs, text, graphics, logos, button icons, images, audio and video clips and software (collectively, “Content”) are protected by copyrights, trademarks and other intellectual property rights that are owned and controlled by the RA or by other parties that have licensed their material to us.

Except where otherwise agreed in writing with the RA, material on the Website is solely for the client’s personal, non-commercial use. Except as provided below, the client must not copy, reproduce, republish, upload, post, transmit or distribute such material in any way, including by e-mail or other electronic means and whether directly or indirectly and the client must not assist any other person to do so.

Without the prior written consent of the RA, modification of the materials, use of the materials on any other web site or networked computer environment or use of the materials for any purpose other than personal, non-commercial use is a violation of the copyrights, trademarks and other proprietary rights, and is prohibited. Any use for which the client receives any remuneration, whether in money or otherwise, is a commercial use for the purposes of these Terms.

The client may occasionally distribute a copy of a research report, or a portion of the same, from the Website in non-electronic form to a few individuals without charge, provided the client includes all copyright and other proprietary rights notices in the same form in which the notices appear, original source attribution, and the phrase “Used with permission from PrimeInvestor Financial Research Pvt. Ltd.”

While the client may occasionally download and store research reports or information from the Website for his/her personal use, he/she may not otherwise provide others with access to the same. The foregoing does not apply to any sharing functionality we provide through the Website that expressly allows the client to share Content or links to Content with others. In addition, the client may not use Content he/she has downloaded for personal use to develop or operate an automated trading system or for data or text mining.

The client agrees not to rearrange or modify the Content available through the Website. The client agrees not to display, post, frame, or scrape the Content for use on another website, app, blog, product or service, except as otherwise expressly permitted by these Terms. You agree not to create any derivative work based on or containing the research products and Content. The framing or scraping of or in-line linking to the Services or any Content contained thereon and/or the use of webcrawler, spidering or other automated means to access, copy, index, process and/or store any Content made available on or through the Services other than as expressly authorized by us is prohibited.

The client further agrees to abide by exclusionary protocols (e.g., Robots.txt, Automated Content Access Protocol (ACAP), etc.) that may be used in connection with the Research Services. The client may not access parts of the Research Services to which he/she is not authorized, or attempt to circumvent any restrictions imposed on your use or access of the Services.

As a general rule, the client may not use the Content, including without limitation, any Content made available through one of our RSS Feeds, in any commercial product or service, without our express written consent.

The client may not create apps, extensions, or other products and services that use our Content without our permission. The client may not aggregate or otherwise use our Content in a manner that could reasonably serve as a substitute for a subscription to the Website.

The client may not access or view the Services with the use of any scripts, extensions, or programs that alter the way the Services are displayed, rendered, or transmitted to you without our written consent.

The client agrees not to use the Services for any unlawful purpose. We reserve the right to terminate or restrict the client's access to the Website if, in our opinion, the client's use of the Services may violate any laws, regulations or rulings, infringe upon another person's rights or violate these Terms.

Prohibited content: The Website includes comments sections, blogs and other interactive features that allow interaction among clients and between clients and the RA. We call the information posted by or contributed by users “Contributed Content.” In the course of availing of the Research Services or uploading any post or comment on the Website, the client shall not post any Contributed Content that (i) contains nude, semi-nude, sexually suggestive photos, (ii) tends or is likely to abuse, harass, threaten, impersonate or intimidate other users of the Website and/or Research Services, (iii) is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely to use or have access to the Website and/or Services, or (iv) otherwise violates, is prohibited or restricted by applicable law, rule or regulation, is offensive or illegal or violates the rights of, harms or threatens the safety of other users of the Website and/or Services (collectively “Prohibited Content”).

We reserve the right to cease to provide the client with the Research Services or access to the Website, or terminate your subscription, with immediate effect and without notice and liability, for violating these Terms, applicable law, rules or regulations and reserves the right to remove Prohibited Content which is in violation of these Terms, or is otherwise abusive, illegal or disruptive. The determination of whether any content constitutes Prohibited Content, violates these Terms, or is otherwise abusive illegal or disruptive, is subject to the sole determination of the Firm.

Changes to Research Services: We are constantly endeavouring to improve the quality of Research Services provided to our clients. Due to this, the form and nature of the Research Services provided may change from time to time without any prior notice to the client. We reserve the right to introduce and initiate new features, functionalities, components to the Website and/or Research Services and/or change, alter, modify, or discontinue existing ones without any prior notice to the client.

Warranty and liability disclaimer: The Website, Research Services, and all the materials and services, included on or otherwise made available to the client through this Website is provided by the RA on an “as is” and “as available” basis without any representation or warranties, express or implied except otherwise specified in writing. Without prejudice to the foregoing paragraph, the RA does not warrant that:

  • This Website and/or Research Services will be constantly available, or available at all;
  • The information on this Website or provided through the Research Services is complete, true, accurate or not misleading; or
  • The quality of any products, services, information, or other material that you obtain through the Website or Services will meet your expectations.

The RA, to the fullest extent permitted by law, disclaims all warranties, whether express or implied, including the warranty of merchantability, fitness for particular purpose and non-infringement. The RA makes no warranties about the accuracy, reliability, completeness, or timeliness of the Website, Research Services, Content, Contributed Content, Services, software, text, graphics and links.

The RA does not warrant that this Website, Research Services, information, content, materials, or any other material included on or otherwise made available to you through this Website, their servers, or electronic communication sent by the RA are free of viruses or other harmful components.

Nothing on this Website constitutes, or is meant to constitute, advice of any kind.

Indemnification: The client:

  1. Represents, warrants and covenants that no materials of any kind provided by him/her will:
    1. Violate, plagiarise, or infringe upon the rights of any third party, including copyright, trademark, privacy or other personal or proprietary rights; or
    2. Contain libellous, Prohibited Content or other unlawful material;
  2. Hereby agree to indemnify, defend and hold harmless the RA and all of the RA’s officers, directors, owners, agents, customers/clients, information providers, affiliates, licensors and licensees (collectively, the “Indemnified Parties”) from and against any and all liability and costs, including, without limitation, reasonable advocate’s fees, incurred by the Indemnified Parties in connection with any claim arising out of any breach by the client of these Terms or the foregoing representations, warranties and covenants. The client shall cooperate as fully as reasonably required in the defence of any such claim. The RA reserves the right, at its own expense, to assume the exclusive defence and control of any matter subject to indemnification by the client.

Applicable law: This Website, including the Content and Contributed Content and information contained herein, and the provision of Research Services shall be governed by the Securities and Exchange Board of India, laws of the Republic of India and the courts of Chennai, India which shall retain exclusive jurisdiction to entertain any proceedings in relation to any disputes arising out of the same. As such, the laws of India shall govern any transaction completed using this Website.

Information gathered and tracked: Information submitted or collected on the Website or pursuant to the use of the Services is stored in a database. Specifically, we store the username, name, e-mail address, contact number, as submitted or collected on our Website or through the provision of the Research Services. We may use such information to send out occasional promotional materials, including alerts on new Services available, or other promotional and marketing material relating to our clients and customers.

In accordance with the Information Technology Act 2000, the name and the details of the Grievance Officer at PrimeInvestor is provided below:

Mr. Srikanth Meenakshi
PrimeInvestor Financial Research Pvt. Ltd., Registered office: 659, 4th Avenue, D-Sector, Anna Nagar Western Extension, Chennai 600 101.
Email: [email protected]

11. Mandatory notice:

Clients shall be requested to go through Do’s and Don’ts while dealing with RA as specified in SEBI master circular no. SEBI/HO/MIRSD-POD-1/P/CIR/2024/49 dated May 21, 2024 or as may be specified by SEBI from time to time.

12. Optional Centralised Fee Collection Mechanism:

SEBI has operationalized a centralized fee collection mechanism for IA and RA. Under this mechanism, clients shall pay fees to IAs/RAs through a designated platform/portal administered by a recognized Administration and Supervision body. This is an optional mechanism for the registered entities. At this time, PrimeInvestor has opted out of this fee collection mechanism. Therefore, all subscription payments for the Research Services will be through the modes as specified in Clause 5 of these Terms.

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