Short-term capital gains from debt mutual funds are added to your income and taxed accordingly
11-Sep-2015 •Research Desk
If I invest lump sum amount in a liquid fund/short term debt fund and withdraw the money in three to six months, what would be the tax on short term capital gain and how do I pay it? Or it will be deducted during redemption? Also, if I invest in long term debt fund for more than three years, what would be the tax on long term capital gain? Also, what would be the taxable amount if I withdraw it before three years?
Capital gains on redemption in liquid funds in three to six months will be added to your income and taxed as per the applicable income tax slab. You need to show it as income while filing ITR. It will not be taxed automatically. It is the responsibility of the investor to pay tax on capital gains.
Current taxation on non-equity investments is given below:
|Investment holding period||Taxation|
|Short Term Capital Gain||36 months or lesser||added to income and taxed as per applicable slab rate|
|Long Term Capital Gain||more than 36 months||20% with indexation|