In what section of the Indian tax does FMP in mutual funds come?

FMPs or Fixed Maturity Plans are a class of Debt Funds. They do not come under Section 80C.

However they do offer good tax benefit as they are usually for 3 years or longer. This means that the gain you make is offset against inflation. This makes tax lesser.

For example, if your gain is 8% per annum and inflation is also at 8% per annum, then the capital gains tax payable is zero. If inflation’s 7% then tax paid is lesser to that extent.