Tax

An investor in the 30% slab (31.2% with cess) invests ₹10 lakh for 15 months. Assume the ₹1.25 lakh exemption for equity long-term gains is already used, and long-term rates of 12.5% plus cess (13%) (illustrative; rules as in 6B.11). (a) An arbitrage fund earns 5.6% a year net of its TER. Compute the gain and the after-tax gain. (b) A liquid fund (units bought after 1 Apr 2023) earns 5.9% a year net. Compute the gain and the after-tax gain. (c) Gold rises 20% over the 15 months. Compare the after-tax gain from a gold ETF with that from a gold fund of funds, assuming both earn exactly 20%. (d) Which answer would change for an investor in the 5% slab, and how?