Archive · 27 Jul 2025
Maharashtra Trusts Can Invest in Mutual Funds, Simplifying Process
Imagine charities and other public trusts as big piggy banks filled with money.
In Maharashtra, these piggy banks can now invest up to half their money in things like mutual funds, which are like a collection of different investments.
Before, they needed permission, but now they don't!
This means more money could flow into these funds, potentially earning more money for the trusts.
It also gives them more choices for investing.
But they still need to be careful and make smart choices to make sure they keep the money safe and meet the goals of the trust.
Maharashtra allows public trusts to invest up to 50% in mutual funds and ETFs without prior approval.
This decision simplifies a previously restrictive process for public trusts.
The change could unlock ₹5,000-10,000 crore or more in investable funds.
Industry experts anticipate increased diversification into equity mutual funds.
Trustees should act with caution, considering their fiduciary duty and tax implications.
- Who
- Public trusts in Maharashtra.
- What
- Maharashtra allows public trusts to invest up to 50% of their capital in mutual funds and ETFs without prior approval.
- When
- The Maharashtra Charity Commissioner issued a notice on July 21st.
- Where
- Maharashtra, India.
- Why
- To simplify the investment process and potentially increase returns for public trusts.
Risk-Averse Trusts
Growth-Focused Trusts
Risk Tolerance
Risk-Averse Trusts
Many trusts are risk-averse and may prefer low-risk investment options.
Growth-Focused Trusts
Relaxed rules could allow for better long-term returns through diversified investments.
Tax Implications
Risk-Averse Trusts
Trusts registered under Section 12A of the Income Tax Act may have stricter investment rules under Section 11(5).
Growth-Focused Trusts
Trusts not seeking tax exemption might benefit most from the new rules.
- Investment Limit
- Up to 50% of capital
- Investment Vehicles
- Mutual funds and ETFs
- Trusts Affected
- Public trusts in Maharashtra
- Estimated Investable Funds
- ₹5,000-10,000 crore or more
- Previous Requirement
- Approval from Charity Commissioner
- Potential Impact
- More trusts diversify into equity mutual funds