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Any help on this question?
Considering my capital gains is only 5 lakhs in 1 year, and I have no other income.. so my tax would = 5% of 2 lakhs = 10000 Rs only? (as upto 3 lakhs is exempt of income tax).

If it is short term capital gains it would be 20% of 2 lakhs and if long term it would be 12.5% of 75K(1.25 is exempted)

Edit : Sorry I didn’t realise the query was about debt funds

I think he's asking about income from debt funds; which is taxable @ slab rate.

Rebate under section 87A is available for capital gains on debt funds. Since the total income < 7 lakhs, after the rebate the tax would be 0.

That is right, I am confused about the slab rate when I don't have any other income as such like salary.

It will be treated as normal income and will be taxable at normal income slab. Eg. if there’s no other income then all of gains from debt funds will be exempt till 5 lacs. If you invest in 80C, then add 1.5L to it. So total 6.5L of gains should be exempt.

This table should clear all confusions:

An exception : (The table doesn't mention it) -
The scenario of Debt funds with the investment date prior to 1st April 2023, which would attract LTCG tax @12.5% without indexation and not the slab rate.

This was taken away on 23 July 2024 much to my dismay...of course I'd be delighted and grateful if you can produce a relevant notification or circular published post the horror show of that day....

My case is the same this year onwards :). Probably the right way to know this is to simulate it in the ITR-2 Excel Utility? I plan to do this probably in the last week of December.

Hello Folks, I had a question. I started investing in Gilt funds from May 2024, since they tend to do well during falling/ steady interest rate periods. Initially i was averaging 10-14% CAGR , however since the past couple of months this has fallen to the 5-7% range. Even my Money market investment is delivering more returns than this. What’s the reason? As it should at least be over 8%.

Gilt funds have returned -10% pa too. It has historically been a -10% pa to +20% pa returns category fund. However, long term average will be more or less equal to interest rate at which Govt raises funds.

It is suitable as a:

- Long term investment (5+ years)
- Hedge against fall in equity markets (NAV shoots up whenever there is a major stock market crash)

Yes, I too have noticed this drop. I believe this is because a rate cut is no longer a given, at least a significant rate cut. A rate cut will put further pressure on the INR-USD exchange rate. And with recent run up on crude prices, it will have further inflationary pressures. So, we just have to wait it out.

I'm posting some stream-of-consciousness thoughts here rather than starting a new thread as the matter is still fresh and I am a ''bhuktbhogi'' (one who has suffered the perils and enjoyed the fruits). It is the nightmare of every bond investor - an actual default.

Background is : BluSmart, an EV ride service defaulted on its NCDs back in February. This triggered what is called a ''cross-default'' under which the bond issuer is obliged to pay not just the tranche on which there is an actual breach of debt covenants but all outstanding NCDs. The debenture trustee triggered the cross-default so at least they did their job.

The rating agencies are another story, till this event, the rating for the gensol group (holding company) was BBB- (stable). When this issue happened, the downgrade was straight to D.

One can argue that this rating doesn't exactly inspire confidence but I'd say its borderline. This is a rating that many online platforms don't shy away from offering these days. Back during peak covid and even later (21-22), one could get AA ratings in double-digit yields while A were going almost to mid-teens. As the Indian stock market bull run continued, the bond market also expanded, including on the retail side. Now, the yields have trended down but also its harder to find good-quality NCDs that offer yields much higher than bank FDs

At this time this issue is ongoing, reflected most visibly in Gensol's share price, which hit lower circuit twice last week and is less than half from its peak. Operationally, Gensol an EPC provider, owns and leases the EVs to Blusmart.

Anyways this post isn't about this company in particular but rather about how safe are the NCDs, whether one needs to watch ratings every now and then and whether the rating agencies can be trusted at all. A retail investor certainly has no tools to measure creditworthiness and they take these ratings quite seriously if not blindly. ICRA downgraded the rating first, CARE followed two days later. It was a bolt from the blue.

Lastly, IREDA, the biggest lender to Gensol says debt repayments are delayed by up to two months.

The last memorable default was IL&FS in 2019 from memory and that led to a panic. I honestly don't know where this one is headed. Is it small cap firms taking on too much debt or a one off. We'll see

[Disclaimer, I have a very small holding in Gensol which is bleeding red now.]

I hope Blusmart bond was paying 10% or over for you to take this kind of risk. I also invest in 2ndary market for bonds but my criteria are:

- The rating agency (don't trust anyone except Crisil, this is the least risky to pick of the lot)

- Rating of the bond itself, nothing less than A rated bond. No amount of incremental interest rate is worth the risk of losing principal.

Gensol, right from the beginning seemed to be good to be true. I've been following the company for last few years, never could muster courage to buy the stock. If you notice now, in hindsight, the charts show split, bonus, equity dilution etc in a short span of time. Even if this is to be ignored, he seemed to have his foot in many places.

Just 10mins ago, I read on CNBC that promoters have mentioned they'll start buying stock back, just that they're not sure when they can do it. This, after them selling nearly 3% last week.

I hope you pay more attention to Credit & liquidity risk before venturing into bond investment.

Ive been investing in Bonds for a few years now. So far no default. I did not buy the blusmart Bond. It was 13-15% range. I'm aware of the risks - this was a cautionary post.