I plan to withdraw money from my debt Mutual fund holdings which I have been holding for more than 3 years and invest in house property (flat) this year (joint ownership). I own one property already (joint ownership). Kindly let me know if I can claim income tax exemption under Section 54F for the income which is coming from the Debt Mutual funds.
Ans: Debt MFs are taxed according to your individual income tax slab rates if units were purchased on or after April 1, 2023. If units were purchased before April 1, 2023, it will be Long-Term Capital Gain (LTCG) and you can take benefit of 54F even if one property owned on the date of redemption of Debt MF acquired before April 1, 2023.