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Tax liability in debt mutual funds

Short-term capital gains are added to your income and taxed as per the income tax slab applicable to you

I am planning to invest in a liquid fund or income fund. How will my returns be taxed?
- Pradeep

If you sell your investments in debt mutual fund schemes before three years, you will have to pay short-term capital gains tax. Short-term capital gains are added to your income and taxed as per the income tax slab applicable to you. If investments are held for over three years, your gains will qualify for long-term capital gains tax of 20 per cent with indexation benefit.

This article was originally published on November 03, 2015.

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