What is the tax liability on earnings or gains on debt funds after a period of 1 year?
Gains on debt fund investments held for over 1 year are liable for long-term capital gains tax. You have two methods to choose from while paying this tax, depending on what is more profitable to you. You can pay either 10 per cent flat tax or 20 per cent after indexation. Factoring in the indexation might be beneficial for investments that have been held for a long time, so figure out what suites you best while paying the tax.