Are the recent amendments to taxation of debt mutual funds likely to change investment behaviour?

One of the key amendments which the government proposed in the Finance Bill 2023 (now Finance Act 2023) is with respect to taxation of Long-Term Capital Gains (LTCG) on sale of units of debt mutual funds. Any investments made in the units of debt mutual funds, (where equity investment is up to 35%) on or after 01 April 2023, will not get the benefit of indexation or treated as LTCG even if held for more than three years and would be taxed at the normal tax slabs applicable to an individual. 

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