1. A Mutual Fund (MF) is a portfolio of various investments.
2. A Fund of Funds (FoF) is a portfolio of various MFs.
3. As per current taxation laws, an Equity-oriented MF is defined as one that always invests at least 65% of its assets in equities of companies.
4. On the other hand, a FoF invests its assets in various MFs, all of which, due to their individual Sebi categorization, may not always be Equity-oriented by investing at least 65% of their assets in equities of companies.
5. Therefore, FoF as a category, is taxed under the Non-equity MF category, even though some may hold only Equity-oriented MFs, and even Sebi has not rationalized its categorization due to various underlying MF schemes with different investments.
2. A Fund of Funds (FoF) is a portfolio of various MFs.
3. As per current taxation laws, an Equity-oriented MF is defined as one that always invests at least 65% of its assets in equities of companies.
4. On the other hand, a FoF invests its assets in various MFs, all of which, due to their individual Sebi categorization, may not always be Equity-oriented by investing at least 65% of their assets in equities of companies.
5. Therefore, FoF as a category, is taxed under the Non-equity MF category, even though some may hold only Equity-oriented MFs, and even Sebi has not rationalized its categorization due to various underlying MF schemes with different investments.