I have invested in Axis Liquid Fund where profit for Short term is 5000 for current year starting from 01.4.25 to till 14.02.25. My Current Salaried Income is more than 4 lac . Will this gain of 5000 will be taxed @ 20 STCG Income . Or if my total salary is less than 7 lac , this income will come under slab rate . Or will this income under special rate of tax , and I have to pay taxes on this as per STCG .
Hello @Varun_Chandekar,
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If your total income is within 7L then you will get the benefit of rebate u/s 87A and your normal rate incomes will be exempt from taxes
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Debt mutual funds are taxed at slab rates regardless of their holding period, thus since this is a normal rate income, tax on the same can be setoff against the 87A rebate.
Thus, if all your income sources including salary, debt capital gains are less than or equal to ₹7L then these will be tax-free.
Can you explain what will be taxable rate and amount if gains from Debt Mutual fund are 7000 and income is more than 7 lac and less than 8 lac .
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What will be taxable percentage
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will stcg @ 20 % calculated on this gain of Rs. 5000
So @Varun_Chandekar, let’s understand the calculation through an example. Assuming your income other than gains from debt MF is ₹7.5L.
As per the new tax regime, all your income, including the ₹7.5L and ₹7k will be taxable at slab rates. These are the tax slabs under the new regime for FY 24-25.
| Income Slab | Tax rate (%) |
|---|---|
| Up to 3 lakhs | Nil |
| 3 to 7 lakhs | 5 |
| 7 to 10 lakhs | 10 |
| 10 to 12 lakhs | 15 |
| 12 to 15 lakhs | 20 |
| Above 15 lakhs | 30 |
In your case, the tax liability will be.
- NIL for income up to ₹3L
- 5% on the next ₹4L = ₹20,000
- 10% on remaining ₹57,000 = ₹5,700
Total tax = ₹25,700 + 4% cess
Moreover, STCG on the axis liquid fund will also be taxed at slab rates and not at 20%. You can check the detailed list of tax rates on different capital assets here.
From 01.04.2026 I have read in Newspaper that GAIN on Debt Mutual fund unit held less than 1 yrs will also be taxed @ 15 % STCG . Can you confirm as per New Tax Bill .
Also all Liquid/Ultrashort/Short Term Mutual fund will also comes under this .
Hi @Varun_Chandekar,
The new tax bill is a proposal and not yet approved by the parliament.
As of now, debt mutual funds bought before 1.4.23 will be categorized as short term or long term based on the holding period (24 months). If such MFs are bought after 1.4.23 then they will be taxed as short term irrespective of their holding period.
Tax rates:
Short term - Slab rates
Long term - 12.5%
Also, liquid funds are debt funds. If more than 65% allocation is in debt instruments it’ll be taxed as per slab irrespective of holding period.