# Tax on debt and fund of funds

**URL:** https://tradingqna.com/t/tax-on-debt-and-fund-of-funds/196996
**Category:** Taxation
**Created:** [August 13, 2026, 4:43am UTC](https://tradingqna.com/t/tax-on-debt-and-fund-of-funds/196996 "2026-08-13T04:43:00Z")
**Posts on this page:** 3
**Page:** 1

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### Author: ![tax007](https://tradingqna.com/letter_avatar_proxy/v4/letter/t/e36b37/32.png) [@tax007](https://tradingqna.com/u/tax007)
#### Post date: [August 13, 2026, 4:43am UTC](https://tradingqna.com/t/tax-on-debt-and-fund-of-funds/196996/1 "2026-08-13T04:43:00Z")

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[  
Question  
 ](https://www.reddit.com/r/IndiaTax/?f=flair_name%3A%22Question%20%3Asnoo_thoughtful%3A%22)

Indian amc’s which have Fund of Funds investing in the US markets and Index funds by Indian amc’s investing in US market are both taxed as debt funds, right?

Now debt funds taxation went through some changes pre and post April 2023 iirc. Suppose there are SIP’s or lumpsums pre and post 2023 then can you please share how does the taxation work here?

If the gains from debt funds are added to the normal income of a taxpayer, then is it still taxfree till 12 lacs (if rebate of 87a is included)?

There is no carry forward of losses for debt funds, right? But is there any way to adjust the debt funds losses somewhere?

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### Author: ![IamAnushka](https://tradingqna.com/user_avatar/tradingqna.com/iamanushka/32/83828_2.png) [@IamAnushka](https://tradingqna.com/u/IamAnushka)
#### Post date: [August 13, 2026, 6:39am UTC](https://tradingqna.com/t/tax-on-debt-and-fund-of-funds/196996/2 "2026-08-13T06:39:37Z")

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@Quicko

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### Author: ![Quicko](https://tradingqna.com/user_avatar/tradingqna.com/quicko/32/19226_2.png) [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [August 17, 2026, 11:52am UTC](https://tradingqna.com/t/tax-on-debt-and-fund-of-funds/196996/3 "2026-08-17T11:52:50Z")

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Hello @tax007

Capital gains from US Stock or funds of Indian AMC investing in US market would not be treated as debt funds and hence the changes in capital gains for pre and post April 2023 would not be applicable.  
The taxability depends on the period of holding if the funds have been held for less than 24 months then it would be treated as STCG taxable at slab rates otherwise LTCG taxable at 12.5%.  
If the gains are STCG taxable at slab rates then benefit of rebate under 87A would be applicable.