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MF taxation

26 April 2024

Hi, For FY 2024-25 i need to plan my tax (for old-regime) so i want to redeem my previous ELSS MF and move it to a liquid MF, then after scheduled days to retain amount in liquid MF, i want to invest in the same ELSS MF. How will i be taxed in the year end for redemption to liquid fund and reinvest in an ELSS MF.

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2 Replies

Vishal Manakshe (271 Points)
Replied 26 April 2024

Hello
The ELSS MF does not allow you to withdraw the funds till 3yrs.

In case, your funds or units are eligible for withdrawal then it will be treated as LTCG (Equity) and will be taxed at the rate of 10% above Rs. 1 lac

there will be no taxation at the time of investing or purchasing any MF

Further, liquid funds are considered as Debt funds, therefore for STCG, tax will be calculated as per slab rates.

sameer dba (3 Points)
Replied 27 April 2024

Thanks Vishal for the update. so i'll have to pay STCG (as per tax slab)for redemption to liquid fund from ELSS fund. Then, in case the ELSS fund is above 1L then 10% LTCG is applicable. is my understanding correct?