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How are liquid funds taxed?

If you sell your funds before three years (36 months), you will have to pay short-term capital gains tax


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I want to know the taxation on liquid fund. If I sell liquid fund and generate gain, is it taxable?
- Vinod Mehra

Yes, capital gains on liquid funds are taxable.

If you sell your funds before three years (36 months), 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 funds are held for more than three years, your gains will qualify for long-term capital gains tax of 20 per cent with indexation benefit on your original investment.

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