Franklin India Gilt Fund: Returns, Risks & Tax Guide

If you’re exploring debt funds, the Franklin India Gilt Fund Direct-Growth aims to generate returns from government securities. This fund has delivered a 7.03% return since its launch on January 1, 2013.

Understanding the Fund Basics

This open-ended Debt: Gilt scheme, launched by Franklin Templeton Mutual Fund, invests primarily in sovereign securities. As of August 28, 2026, its Net Asset Value (NAV) for the Direct plan’s Growth option stood at Rs 67.89.

The fund’s expense ratio is 0.64%, which is slightly above the category average of 0.52%. Its Assets Under Management (AUM) reached Rs 148.78 crore as of July 31, 2026, and it’s classified under a moderate risk category by SEBI.

Key Details at a Glance

Here are some key figures for this fund. It launched on January 1, 2013, with a current NAV of Rs 67.89 as of August 28, 2026. The expense ratio is 0.64%.

Assets Under Management (AUM) stood at Rs 148.78 crore on July 31, 2026. Since launch, it has returned 7.03%, and it falls under a Moderate risk category.

Performance and Investment Snapshot

The fund has shown varying trailing returns: 7.29% for one year, 6.64% for three years, and 5.58% over five years. Its benchmark is the NIFTY All Duration G-Sec Index.

You can start investing with a minimum of Rs 10,000, and subsequent additions require at least Rs 1,000. If you prefer a Systematic Investment Plan (SIP), the minimum is Rs 500, with no exit load.

What’s Inside Your Portfolio?

A substantial 82.52% of this fund’s portfolio is allocated to government-backed securities, aligning with its core objective. The average maturity is 10.39 years, and the modified duration is 3.71 years.

The fund’s Yield to Maturity (YTM) is 7.11%, and it is jointly managed by Rahul Goswami since October 6, 2023, and Anuj Tagra since March 7, 2024.

Navigating Tax Implications

Understanding the tax rules for your investments is crucial, especially for debt funds like this one. Here’s a breakdown of how capital gains and dividends are taxed:

For investments made after April 1, 2023, any capital gains you make are added to your income and taxed according to your applicable income tax slab rate.

For investments made before April 1, 2023, if you redeem gains within 3 years, they’re taxed at your slab rate. However, if you redeem after 3 years, you benefit from a 20% tax rate with indexation.

Regarding any dividend income from the fund, this income is also added to your total income and taxed at your slab rate. A 10% Tax Deducted at Source (TDS) applies if your dividend income exceeds Rs 5,000 in a financial year.

Understanding these specific tax treatments is key for managing your returns from gilt funds effectively. This fund offers a clear path to investing in sovereign securities, with its tax structure being a critical aspect for your financial planning.