Market Linked debentures (MLDs) are instruments where the payoff/coupon on the instrument is variable and linked to an external benchmark such as Government Security or Nifty index. For listed MLDs with holding periods of 12 months or more, the post-tax return to the investor can be significantly higher owing to a low taxation rate of only 10% + surcharge + cess if the returns are booked as long-term capital gains.

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