Question

What is the tax treatment of Fixed Maturity Plans (FMPs)?

a.

Tax-free returns

b.

Capital gains tax on withdrawal

c.

No tax benefits

d.

Indexation benefit for investments over a year

Answer: (d).Indexation benefit for investments over a year Explanation:FMPs get tax treatment similar to debt mutual funds. Investments in FMPs with a duration of more than a year provide indexation benefits to compensate for the impact of inflation on real income.

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Q. What is the tax treatment of Fixed Maturity Plans (FMPs)?

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