Until 2014, fixed maturity plans were very popular, as long-term capital gains tax was applied if they were held for more than a year. This was changed to three years, creating a lot of disruption. Funds tried to beat this new ruling by rolling over schemes to beyond this duration, as the tax ruling held with retrospective effect. In 2018, equity gains came under the long-term tax ambit but grandfathering was permitted, with January 31 being considered as the date of acquisition for all investments made earlier. While this was irksome, existing holdings were protected.

In 2020, the Budget dealt a blow to all plans for future income in the form of dividend, which became taxable in the hands of the recipient. Needless to say, companies never increased the dividend to compensate shareholders.

In 2023, the indexation benefit on debt mutual funds was withdrawn and all long-term gains made would be added to the income and taxed appropriately. In 2024, this benefit was removed for property, but restored subsequently. Meanwhile, there was a new tax scheme open to individuals, which was devoid of any exemptions but had lower rates. Interestingly, this new system converges into the old one once the income nears the `20 lakh per annum mark. Therefore, the discussion on which scheme is better holds only for those whose income falls below this threshold.

Clearly, planning for the future has gotten chaotic, especially if one is doing so for retirement. Also, while evaluating any tax regime, its........

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