They say this would also help investors avoid taxes they would otherwise have paid, by redeeming after one year, under new tax rules.
Experts believe investors contemplating the extension should also take into account the schemes’ liquidity profile and the change in interest rate cycle during the proposed period of investment, not only the change in tax rules.
The government has proposed to increase the rate of tax on debt funds from 10 per cent, to 20 per cent.
Further, the tenure for claiming long-term capital gains has been increased to 36 months from the existing 12 months. These changes are expected to be applicable to existing investments as well.
Fund houses have already begun reaching out to investors for their consent to roll over investments for two more years.
HDFC Mutual Fund's FMP 371D July 2013, of a year and due for maturity on July 30, has asked investors to give their consent by Friday if they want to extend it.
If investors do not respond, the default action would be to deposit the money in the investor's account.
A similar process is on at other fund houses, say sector officials.
Srikanth Meenakshi, founder and chief operating officer,
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