The key selling point of the fund is its tax treatment.
Nippon India Mutual Fund has introduced the Income Plus Arbitrage Omni Fund of Fund, an open-ended hybrid fund of funds scheme that invests in domestic active and passive debt-oriented and arbitrage mutual fund schemes.
The scheme is structured to keep exposure to debt mutual fund schemes, debt and money market instruments, including triparty repo on government securities, treasury bills, cash and cash equivalents, below 65 per cent at all times.
The key selling point of the fund is its tax treatment. Under the Income Tax Act, 2025, a fund of funds investing less than 65 per cent in debt instruments and held for more than 24 months qualifies for long-term capital gains tax at 12.5 per cent, compared to the slab rate applicable to specified mutual funds.
The fund house illustrates this with a scenario where an investment of ₹1,00,000 at 8 per cent CAGR over 24 months results in a post-tax value of ₹1,14,560 under this fund versus ₹1,11,648 under a specified mutual fund taxed at 30 per cent, translating to a post-tax CAGR of 7.03 per cent against 5.66 per cent.
Unlike debt or arbitrage funds where investors bear the tax burden each time they switch between schemes, rebalancing within this fund of funds does not trigger a tax liability for investors, as the fund manager handles allocation internally.
The fund targets investors with a minimum two-year horizon seeking better risk-adjusted returns, those who prefer delegating fund selection to a professional manager, and high-net-worth individuals focused on post-tax efficiency. The scheme’s riskometer is rated Moderate, as is its benchmark, a composite of 60 per cent CRISIL Short Term Bond Index and 40 per cent Nifty 50 Arbitrage Index.
Investors are advised to consult a financial adviser before investing. Mutual fund investments are subject to market risks.
Published on August 12, 2026
