Mutual Fund Mastery interview preparation

Questions

100

Traced to a firm

32

Firms

19

Updated

September 2026

Asked at

All firmsVanguard5BLBlackRock3FTFranklin Templeton3Invesco3PIMCO3Fidelity Investments2J.P. Morgan2Morningstar2Neuberger Berman2SCSchroders2T. Rowe Price2Amundi1BMBNY Mellon1Goldman Sachs1Man Group1Northern Trust1SSState Street1Sycamore Partners1WMWellington Management1

Topic

All topicsFund structure and regulation7NAV and operations6Scheme categorisation4Equity schemes5Debt schemes7Risk, liquidity and disclosure7Index funds and ETFs6Hybrid and solution schemes3Costs, plans and commissions6SIP and investor mechanics5Performance measurement6Taxation5Distribution, compliance and NISM5Portfolio construction and advice5Estimation and numeracy5Markets and industry6Career and fit12

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseFitBrainteaserMarket view

1. 066Is a switch between two schemes of the same AMC a taxable event? And what are STT, stamp duty and TDS on mutual funds?TaxationIntermediatetechnicalIndian AMCsDistribution and sales

   Say this

   Yes, a switch is a redemption plus a purchase, fully taxable, and exit load applies on the redemption leg. That is true even between two plans of the same scheme, so a regular-to-direct switch triggers capital gains too. The transaction taxes are small but real: stamp duty on the way in, STT on the way out of equity schemes.

   Then walk it

   1. Switch and STP both work the same way — one redemption, one purchase, on the same day. There is no roll-over relief in Indian mutual fund taxation. A weekly STP is fifty-two taxable redemptions a year.
   2. Stamp duty: 0.005 percent on every purchase and switch-in of units, in force since July 2020. On a 10 lakh purchase that is 50 rupees, so it matters only for very high-frequency treasury flows.
   3. Securities transaction tax: 0.001 percent on redemption of equity-oriented scheme units. Debt schemes are outside STT.
   4. TDS: on IDCW payouts to resident investors, 10 percent above a threshold that was raised to 10,000 rupees a year. On capital gains for residents there is no TDS — the investor pays through advance tax and the return.
   5. For non-residents the position is different and this is a favourite follow-up: TDS is deducted at source on both IDCW and capital gains for NRIs, at rates depending on the type of gain, and treaty relief has to be claimed with a tax residency certificate.
   6. The advisory point that falls out of all this: never rebalance casually. Every reallocation between schemes is a tax event, which is precisely why a single dynamic asset allocation fund can be efficient for a client who would otherwise be switching twice a year.

   Where candidates lose it

   Saying a switch inside the same AMC, or between direct and regular plans of the same scheme, is tax-neutral. It is not, and this error produces angry clients and complaints. Also know that STT applies only to equity-oriented schemes.

   Expect next

   • Is TDS deducted on an NRI's redemption?
   • How does that change how you rebalance a portfolio?
   • Does stamp duty apply to an SIP instalment?
2. 067Explain tax harvesting in equity funds, and how you would do it for a client this financial year.TaxationIntermediatecase studyWealth and advisoryDistribution and sales

   Say this

   Harvesting means deliberately realising long-term equity gains up to the 1.25 lakh annual exemption and reinvesting immediately, so you reset your cost base for free. Done every year, it permanently removes a slice of future tax from the portfolio.

   Then walk it

   1. The mechanics: identify units held more than twelve months, redeem enough that the realised long-term gain is just under 1.25 lakh, then buy the same scheme back the next day. The exemption is used, no tax is paid, and the new units carry a higher cost of acquisition.
   2. Worked example: a client sits on 4 lakh of unrealised long-term gain. Harvest 1.25 lakh a year for three years and the eventual taxable gain shrinks by 3.75 lakh, saving about 47,000 rupees at 12.5 percent. That is a real return on an afternoon's work.
   3. Constraints to check before you do it. Exit load on any units under twelve months old, though by definition harvested units are older. The holding-period clock resets on the repurchased units, so do not harvest money you might need within the next year.
   4. There is no wash-sale rule in India for gains harvesting, so buying back immediately is fine. For loss harvesting the position is less settled and repeated same-day round trips in the same scheme invite scrutiny, so leave a gap and document the rationale.
   5. Loss harvesting is the other half: realise losses to set against gains, remembering short-term losses can offset both short and long-term gains while long-term losses offset only long-term. Losses carry forward eight years if the return is filed on time.
   6. The operational caution: use the exemption across the whole portfolio, not per scheme, and count listed shares and other equity assets too. And do it in January or February, not on 31 March, because an NAV date and a T plus settlement can push the transaction into the next financial year.

   Where candidates lose it

   Harvesting more than the exemption and creating a tax bill for no reason, or forgetting that the exemption is per person per year across every equity asset. The other real-world failure is leaving it to the last week of March and missing the financial year.

   Expect next

   • What is the difference between harvesting gains and harvesting losses?
   • Does a wash-sale rule apply in India?
   • When in the year would you do it and why?

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.