My personal choices for Liquid or Debt oriented funds have been HDFC MIP Long term, Reliance MIP. BSL MIP Savings 5 is also good, but returns haven't been truly fantastic off late.
Taxation is an interesting part. Since Liquid funds have very little or no equity exposure, they don't pay STT. Hence, any profit earned within a year is treated as normal income and not STCG. Hence, you pay tax according to your tax bracket.
If you hold the liquid fund for more than a year, you would pay LTCG, where you can benefit from indexation. I am not too sure if it's 1 year or 3 years, but last I checked, it was one year.
Happy Investing !!
Taxation is an interesting part. Since Liquid funds have very little or no equity exposure, they don't pay STT. Hence, any profit earned within a year is treated as normal income and not STCG. Hence, you pay tax according to your tax bracket.
If you hold the liquid fund for more than a year, you would pay LTCG, where you can benefit from indexation. I am not too sure if it's 1 year or 3 years, but last I checked, it was one year.
Happy Investing !!
Mr India