Consider a scenario where I deposit Rs. 10,000 in a liquid fund. Interest of Rs. 400 got accrued after 6 months (considering 8% ROI).
Now, if I withdraw Rs. 5,000 from the fund, how the short term capital gain will be calculated ?
1. Will entire Rs. 5,000 withdrawn be considered as original capital and no tax levied ?
2. Will Rs. 4,600 be considred as original capital and Rs. 400 as interest received and STCG is levied on Rs. 400 ?
3. Rs. 5,000 is 48.08% of Rs. 10,400. So STCG is levied on 192.32 which is 48.08% of Rs. 400.
Da-It is based partially. Let us say that Rs.5,000 amount of withdrawal carry 50 units and NAV is Rs.100. So you request for Rs.5,000 withdrawal. Taxation will be only on 50 units of withdrawal. They calculate invested price to the current price. Difference is your earning, which is considered for taxation. STCG will be on that difference amount only.
Hope I cleared your doubt. Let me know if you still have confusion.
Now I have a habit to invest in short term debt fund every month unevenly. Sometimes 20K , 30k etc.
How the tax would be calculated if i withdraw say 1 lakh from the accumulated funds
Got it. So
STCG = 5000 * (current NAV – NAV at the time of purchase)
Thanks for clarifying.
Actually, the correct formula is
STCG = amount to be withdrawn * ( 1 – NAV at the time of purchase / current NAV)