What is the way to calculate capital gains on debt funds?
Earnings on investments of any kind, when held for over a year are referred to as long-term capital gains. When the investments are held for less than a year, the gains are short-term capital gains. In case of short-term capital gains from debt funds, it is added to your taxable income. Long-term gains from debt funds are subject to either 10 per cent flat tax or 20 per cent with indexation. You can choose any of these methods, whichever is beneficial to you.