Is income tax applicable to an individual if he withdraws money from debt fund after one year, say with 10 per cent profit?
-Debabrata Dutta
Yes, tax is applicable on both short-term and long-term gains from a debt fund. If you withdraw investments before completing one-year, the gains will attract short-term capital gains tax payable as per the tax slab. The long-term capital gains on debt funds held for more than a year is liable for long-term capital gains tax. This will be 10 per cent of gains or 20 per cent after indexation of gains plus applicable surcharge and education cess.
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