Investors in the PPFAS Flexi Cap Fund can now save on taxes if their annual income is below ₹12 lakh. This follows Budget 2024 changes and the fund’s decision to allow an IDCW (Income Distribution cum Capital Withdrawal) option from October 31, 2025.
Under the new tax regime, income up to ₹12 lakh is tax-free. Capital gains from mutual funds (12.5% for long-term and 20% for short-term) are taxed regardless of income level. IDCW, however, is taxed as regular income. This means if total income, including IDCW, remains under ₹12 lakh, the payout becomes tax-free.
Suppose an investor earns ₹11 lakh a year and puts ₹10 lakh into the fund.
This approach is especially useful for low-income investors and senior citizens who seek regular income without tax leakage.
Read more: SIP Calculator: Here's How A ₹5,500 SIP Can Help You Build ₹12 Lakh in 10 Years.
The IDCW option in PPFAS Flexi Cap Fund offers a tax-efficient way to generate income, particularly for those earning below ₹12 lakh. While payouts are not assured, the structure provides a valuable alternative to traditional growth plans and may benefit retirees and investors in lower tax brackets.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Oct 3, 2025, 1:23 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates