Side Pocketing Should Be Next Tax Focus
Now that mutual funds are allowed to segregate risky assets, tax implications in such cases should be well defined.
Before the end of 2018, market regulator SEBI issued a circular permitting mutual funds (MFs) to create a segregated portfolio pursuant to a credit event. Called 'side pocketing' in industry parlance, this is prevalent globally. The reason for such relaxation could be the recent NBFC crisis, which sparked panic among investors. However, there is little clarity regarding tax implications of such a measure that
