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Personal Finance News

Mutual Fund taxation rule change in Budget 2026: New rule for offset of interest against dividend income

rajeev kumar
By Rajeev Kumar

1 min read | Updated on February 01, 2026, 14:18 IST

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SUMMARY

Union Budget 2026 has proposed not to allow any deduction in respect of any interest expenditure incurred in relation to dividend income or income from units of mutual funds.

new mutual fund tax rule in budget 2026

Budget 2026: Offset of interest not allowed against mutual fund dividends.| Image source: Shutterstock

Union Budget 2026 has proposed not to allow any deduction in respect of any interest expenditure incurred in relation to dividend income or income from units of mutual funds.

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"It is proposed to provide that no deduction shall be allowed in respect of any interest expenditure incurred in relation to dividend income or income from units of mutual funds, and to omit the existing provision permitting such deduction subject to a specified ceiling," the Budget documents say.

(more details soon)

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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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