Rollover of fixed maturity plans (FMPs): Smart things to know

Fixed maturity plans (FMPs) are closed-end funds issued for a specific maturity period, at the end of which units can be redeemed or rolled over.

A rollover if offered by a mutual fund, enables investors to stay invested in the FMP for a longer period of time, until the next maturity date.

CBDT has clarified that such rollover of FMPs will not attract capital gains tax, as the scheme remains the same.

Rollover has become important after the modification of holding period for applicability of long term capital gains tax on FMP was modified from 12 months to 36 months.

Investors can choose to exit at NAV depending on their needs and pay applicable tax. Rollover will not be treated as redemption by the taxman.
The content on this page is courtesy Centre for Investment Education and Learning (CIEL).