What are the tax implications of short-term savings and investments?

In India, the tax implications of shortterm savings and investments depend on the type of investment you choose. Generally, interest income from savings accounts, fixed deposits, and recurring deposits is taxable as per your income tax slab rate.

For debt mutual funds, shortterm capital gains (investments held for less than three years) are taxed as per your income tax slab rate. Longterm capital gains (investments held for more than three years) are taxed at a flat rate of 20% with indexation benefit.

For equity mutual funds, shortterm capital gains (investments held for less than one year) are taxed at 15%, while longterm capital gains (investments held for more than one year) up to Rs. 1 lakh are exempt from tax. Gains above Rs. 1 lakh are taxed at a rate of 10% without indexation benefit.

It is important to consult with a tax advisor or financial planner to understand the tax implications of your shortterm savings and investments.