1. Budget amendment proposes to do away with long-term capital gains tax on debt investments. This effectively ends the tax arbitrage that used to exist between bank deposits and debt schemes.
   
2. Experts view this as a negative for mutual funds as investors may move capital from debt schemes to bank FDs or other long-term instruments like non-convertible debentures.
   
3. According to CLSA, the measure would have a moderate to low impact on profitability, as bulk of the revenue/profitability for AMCs accrues from equity assets and non-liquid debt AUMs are neither higher growth nor higher profitability segments.
   

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