The introduction of long term capital gains tax on equity mutual fund schemes may result in some investors moving away from these schemes and opting to invest in Unit Linked Insurance Plans (ULIPs), fear some mutual fund participants.
"The introduction of LTCG tax would open an arbitrage window. ULIPs will definitely have an advantage over equity mutual fund schemes," said a mutual fund official, who didn't want to be quoted. "It won't be surprising if insurance advisors use the opportunity to push these products."