Mumbai, Feb. 9 -- The new slab rates and exemption threshold introduced in the Union Budget 2025-26 under the new tax regime marked the beginning of a new chapter for the Indian middle-class taxpayer.

However, the relaxations have reduced the tax advantages of equity investments for small and medium investors, especially those with annual incomes of up to Rs.24 lakh.

Historically, investors often chose equity investments like arbitrage funds and hybrid funds like balanced advantage funds for their preferential tax treatment compared to regular income.

Until Budget 2024, individuals earning more than Rs.10 lakh were taxed at 30% under the old tax regime, which made equity investments very attractive as long-term capital gains (LTCG) wer...