In which mutual fund can I invest for short term period

I want to invest my business fund for short duration in which which product and fund is good. I need a fund which do not attract tax and there will be flexibility of where ever we want we can withdraw funds?

Aug 3, 2019 by Chirag Agrawal,   |   Mutual Fund

It seems that you want to park your surpluses lying in bank account in mutual funds to earn superior return!

Yes, mutual funds have that solution! Please read this

In fact you can even invest for few days in funds like Overnight Debt Funds. However, please note that there is no way you can avoid taxes on the gain made by investing in debt mutual funds. All profits made within 3 years from the date of your investments in debt funds will be treated as short term capital gains and added to your income. This will be taxed at the income tax rate applicable to you.

Profits made after 3 years (on debt mutual funds) will be treated as long term capital gains and taxed at 10% after allowing Indexation.

However, Arbitrage Funds are taxed as equity - Profits made within a year is treated as short term capital gain and taxed at 15%. Profits made after 12 months is treated as long term capital gains and taxed at 10% (if the total profit in a year is Rs 1 Lakh). Profits from equity/ equity oriented funds, less than Rs 1 Lakh are tax free.

Following category of funds could serve your investment needs and you can read more about them -

Liquid Funds

Arbitrage Funds

Overnight Funds

To select the best funds in these categories, do check the urls below -

Hope the above is helpful to you.

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