Tata Digital India Fund Direct Growth

Tata Digital Fund is a sectoral equity fund that invests in India’s IT (Information Technology) and Digital ecosystem. The fund invests at least 80% of its assets in equity and equity-related instruments of companies in the IT sector, both in India and overseas. The scope of businesses in the IT sector includes: 

-IT services and consulting firms

-Software and hardware companies

-Digital infrastructure providers like data centres and leased-line operators

-Fintech platforms

-Internet-based services, including e-commerce, IoT, and tech platforms

-Online and digital solution providers

The scheme is managed by Meeta Shetty and Kapil Malhotra, both of whom bring diverse experience in Technology and the innovation space.

Investment Strategy

The funds’ portfolio is built using a bottom-up stock-picking method, backed by thorough fundamental research. Key factors considered during stock selection include:

-Management quality and governance

-Long-term earnings potential

-Technological innovation and adaptability

-Competitive positioning in the digital economy

Taxation On Tata Digital India Fund

Since Tata Digital India Fund is an equity mutual fund, your tax liability depends on how long you stay invested:

-If you sell your units within 12 months, the gains are treated as Short-Term Capital Gains (STCG) and taxed at 20%.

-If you sell after 12 months, the gains are classified as Long-Term Capital Gains (LTCG). Here, the first ₹1,25,000 of gains is tax-free each financial year. Any amount above that is taxed at 12.5%.

Who Should Invest In Tata Digital India Fund?

Tata Digital India Fund is best suited for investors who have a long-term investment horizon and a strong belief in the growth potential of India’s digital and technology sectors. It is ideal for those who want to participate in the rising demand for IT services, digital infrastructure, e-commerce, fintech, and related innovations.

However, since this is a sector-specific fund, it carries higher concentration risk. The fund’s performance is closely tied to the health of the IT and digital sectors meaning it can outperform strongly during upcycles, but also underperform sharply during downturns.

Allocation & Historical Returns

Currently, the fund's portfolio comprises 15.9% small-cap stocks, 70.42% large-cap stocks, and 9.56% mid-cap stocks.

With an AUM of ₹11688.0 crores, Tata Digital India Fund Direct Growth generated a return of 9.6% in 1 year, 18.2% in 3 years, 29.6% in 5 years. while its benchmark index (Nifty 500) generated 4.7% in 1 year, 20.6% in 3 years, and 22.5% in 5 years.