Arbitrage mutual funds see 2,507% jump in inflows in January. Can higher STT and tax changes dull the shine?

Arbitrage funds saw a massive 2,507% inflow surge in January, driven by volatility and tax efficiency. However, the Union Budget 2026's increased STT on F&O trades and tax changes are expected to slightly reduce returns and moderate future inflows, though they may remain attractive for high-income investors.