Navigate Indian Investment Taxes with Confidence

An interactive guide by M-Vita Services, designed to demystify the latest tax laws and empower you to make smarter investment decisions for optimal post-tax returns.

Start Exploring

Old vs. New Tax Regime: Which is Right for You?

The most crucial decision in tax planning is choosing your regime. The old regime offers deductions but has higher rates, while the new regime offers lower rates with fewer deductions. Use our interactive calculator to see which regime might save you more based on your income.

Tax Calculator

Includes 80C, 80D, HRA, home loan interest, etc.

Tax Under Old Regime

Tax Under New Regime

Recommendation:

Taxation by Asset Class

Different investments have different tax rules. The holding period is key to determining your tax liability. Select an asset class below to understand its specific Short-Term (STCG) and Long-Term (LTCG) capital gains tax implications.

Equity & Equity Mutual Funds

Taxation hinges on a 12-month holding period. Recent changes have increased the STCG rate to discourage short-term speculation.

STCG (≤ 12 months): Taxed at a flat 20%.

LTCG (> 12 months): Taxed at 12.5% on gains exceeding the annual exemption of ₹1.25 lakh.

Debt Instruments & Fixed Deposits

A major tax reform has aligned the treatment of new debt fund investments with FDs, removing the previous tax arbitrage.

Fixed Deposits: Interest is fully taxable at your income slab rate.

Debt MFs (Post Apr 1, 2023): All gains are treated as STCG and taxed at your income slab rate.

Note: Older debt fund investments (pre-April 2023) retain LTCG benefits if held over 24 months.

Real Estate

The holding period for property is 24 months. A key distinction exists for properties acquired before and after July 23, 2024, regarding the indexation benefit.

STCG (≤ 24 months): Gains are added to income and taxed at your slab rate.

LTCG (> 24 months): Taxed at 12.5% without indexation for new properties. Older properties have an option for 20% with indexation.

Gold & Sovereign Gold Bonds (SGBs)

Physical gold and ETFs are taxed based on a 24-month holding period. SGBs offer a unique tax advantage if held to maturity.

Physical Gold (STCG ≤ 24 months): Taxed at your slab rate.

Physical Gold (LTCG > 24 months): Taxed at 12.5% without indexation.

SGBs (Held to Maturity - 8 yrs): Capital gains are completely Tax-Exempt.

Tax Strategies for Different Profiles

Tax laws aren't one-size-fits-all. Special provisions and rates apply to different types of taxpayers. Select a profile to see key tax considerations, benefits, and TDS rules relevant to you.

Resident Individual

  • ●Basic Exemption (Old): ₹2.5 lakh
  • ●TDS on FD Interest: 10% on interest over ₹50,000 (FY 25-26)
  • ●Dividend Tax: Taxed at slab rates; 10% TDS over ₹10,000
  • ●Equity LTCG: 12.5% over ₹1.25 lakh exemption

Senior Citizen (60+)

  • ●Basic Exemption (Old): ₹3 lakh
  • ●TDS on FD Interest: Higher threshold of ₹1 lakh (FY 25-26)
  • ●Interest Deduction (80TTB): Up to ₹50,000 on all bank interest
  • ●Health Insurance (80D): Higher deduction limits for premiums

Non-Resident Indian (NRI)

  • ●Tax Liability: Only on income earned or accrued in India
  • ●NRE Accounts: Interest income is completely tax-free
  • ●Higher TDS Rates: 30% on FD interest, 20% on dividends
  • ●DTAA Benefit: Can claim relief to avoid double taxation

The Role of Insurance in Your Tax Portfolio

Insurance is a tool for both risk management and tax planning. However, recent regulations have changed the tax treatment of high-premium policies, shifting their role from pure tax-saving instruments to protection-focused products.

Is Your Insurance Maturity Amount Taxable?

Traditional & Endowment Policies

For policies issued after April 1, 2023, the maturity proceeds become taxable if the total annual premium you pay across all such policies exceeds ₹5 lakh.

Key Cap: ₹5,00,000 aggregate annual premium.

Unit-Linked Insurance Plans (ULIPs)

For ULIPs issued after Feb 1, 2021, maturity proceeds are taxed as capital gains if the total annual premium for all your ULIPs exceeds ₹2.5 lakh.

Key Cap: ₹2,50,000 aggregate annual premium.
Universal Exemption: The death benefit paid to the nominee is always fully tax-exempt, regardless of the premium amount. This reinforces the primary purpose of life insurance as a protection tool.

Advanced Tools & Compliance Tips

Effective tax management involves proactive strategies and diligent compliance. Here are some key concepts to help you optimize your returns and stay compliant.

The Art of Tax-Loss Harvesting

This is a legal strategy to reduce your tax liability. By selling investments at a loss, you can offset gains from other investments. This transforms a market loss into a tangible tax saving.

  • Short-Term Loss: Can be set off against both Short-Term and Long-Term Gains.
  • Long-Term Loss: Can only be set off against Long-Term Gains.
  • Carry Forward: Unused losses can be carried forward for up to 8 assessment years.

Choosing the Correct ITR Form

Your investment choices directly impact your compliance requirements. Filing the correct Income Tax Return (ITR) form is crucial.

  • ITR-1 (Sahaj): For simple cases - salary, one house property, and interest income up to ₹50 lakh.
  • ITR-2: Required if you have any capital gains, income from more than one house, or foreign assets.
  • ITR-3: For individuals with income from a business or profession, including F&O trading.