Best Kotak Debt Mutual Funds

Kotak Mahindra Mutual Fund is one of India’s top 10 AMCs in terms of asset size and customer base. The company came into existence in 1998, and as of 31st March 2022, they have managed assets worth Rs.23,3780.35 crore.

The AMC offers more than 40 regular mutual fund schemes and 35+ direct MF plans, including the best Kotak debt mutual funds. 

Debt mutual funds predominantly invest in fixed-income instruments. Government and corporate bonds, debt securities of different types, and other money market instruments largely constitute debt MF portfolios. 

The upsides of debt funds are a low-cost structure, comparatively high liquidity, and stable returns. These are also less volatile and involve lower risk compared to equity mutual funds. The downside to debt funds is they typically offer less significant returns than their equity counterparts. 

However, the precise scale of these advantages and disadvantages vary, depending on the type of debt fund. Approximately 15 debt fund categories are there based on the underlying asset and duration. 

The best Kotak debt mutual funds 2025 feature more than 10 schemes with various short and long-term options under this portfolio. 

Taxability

Besides the classification of best Kodak debt mutual funds, it’s also necessary to understand their taxability. 

Long-term Capital Gains Tax: Capital gains realised after the 3rd year of investment are considered LTCG. If you redeem the best Kotak debt mutual fund units after 3 years, a 20% tax will be applicable on the returns alongside indexation benefits. This benefit will remain applicable for each year you remain invested in a debt mutual fund. 

Short-term Capital Gains Tax: If you sell your debt mutual fund units before the 3-year mark from the date of purchase, the proceeds will be taxed per the income tax slab rate you qualify for. For instance, if you belong to the 10% tax slab, you are liable to pay 10% + 4% cess as STCGT.

TDS: Tax deducted at source is not applicable on debt mutual funds.

Factors to Consider Before Investing

Being aware of the taxability of debt mutual funds is imperative to make a suitable decision about investments and liquidating them. A comprehensive idea about the factors to consider is also essential in this regard. 

Investment objective: The first point to evaluate is the objective of investment. It is vital to be thorough about it as it will help you choose the right scheme from top Kotak debt mutual funds. You can select a plan per your financial goals and the timeframe within which you aim to achieve that. 

Risk appetite: Mutual fund investments are subject to various types of risks. Thus, it’s necessary to weigh in your capacity of digesting the same before investing. Theoretically, debt funds are minimally prone to market risk but significantly vulnerable to credit and inflation risks. Consider the associated risk factor to determine the best Kotak debt mutual funds.

Past performance of the fund: It is imperative to review the past performance of any fund before making a decision. Although previous performance isn’t an indicator of the probable returns, it offers insights into the bearish and bullish trends observed in different market conditions over a prolonged period.

Holding analysis: This parameter is also essential since the holding analysis shows where the resources are invested. It also provides an elementary idea about the level of returns to expect and the scale of losses to account for. 

Experience of the fund manager: It is also vital to check the fund manager’s experience prior to selecting a Kotak debt mutual fund. This piece of data can be an indicator of whether the fund manager is sufficiently equipped to navigate through severe market conditions. 

Expense ratio: The expense ratio denotes the aggregated expenses of managing a debt mutual fund, and it is deducted from the NAV.

Exit load: Exit load is charged by an AMC if you divest from a scheme partially or fully within a specific period, as mentioned in the scheme-related documents. However, certain schemes may not feature any exit load as it depends on particular plans. It’s wise to verify these aspects beforehand. 

Selecting the best Kotak debt mutual funds might be a tough ask for uninitiated investors. However, evaluating the aforesaid points carefully and an elementary understanding of mutual fund dynamics can be a good starting point.