Debt Oriented Mutual Funds || Tax Rate Changes
No LTCG tax benefit from April 1, 2023 for Debt mutual funds
💡At present, investors in debt funds pay income tax on capital gains according to their income tax bracket for the first three years of holding, after which they are taxed at a rate of 20 per cent with indexation advantages or 10 per cent without indexation.
💡This LTCG benefit will no longer be available after April 1. Also, the indexation benefit will no longer apply to debt funds that are held for longer than three years.
💡As per the Finance Bill 2023, any capital gain on redemption of debt funds purchased on or after April 1, 2022, will be taxed as per the income tax slab rate applicable to your income.
💡The proposed changes, however, won't affect any current or future investments made in debt funds, overseas funds, or gold funds until March 31, 2023. They will still be eligible for the preferential long-term capital gains tax treatment.
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