Stamp duty to pinch liquid fund returns further

Parking money with liquid mutual fund schemes — a product used by investors to hold their idle cash — for shorter periods will end up squeezing returns further. From July 1, a stamp duty of 0.005% will be levied on every mutual fund purchase — be it through lump sum or systematic investment plans (SIPs). The lower the holding period of investments, the higher will be the impact. The move could impact large institutional investors who mostly put their money in liquid schemes for shorter time periods.

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