A multi-asset mutual fund (MF) as the name suggests invests in various asset classes such as equity, debt, commodities, and Real Estate Investment Trusts (REITs), among others. This category of mutual funds, however, operates under a different taxation framework compared to other mutual funds.
In the case of multi-asset mutual funds, the taxation is determined based on the fund's asset allocation. Depending on whether the fund qualifies as an equity-oriented, debt-oriented, or specified mutual fund, the respective tax treatment as aforementioned will apply. Thus, the tax treatment of a multi-asset allocation mutual fund is driven by its underlying asset allocation.
