New Delhi, June 17 -- Debt mutual funds primarily invest in debt and money market instruments. The underlying portfolio of a debt fund includes government securities, treasury bills, corporate bonds, debentures, commercial papers, certificates of deposit, and other fixed-income instruments.

For tax purposes, mutual funds that invest at least 65% of their assets in debt and money market instruments are classified as debt-oriented mutual funds.

So, let's understand how debt mutual fund units are taxed based on whether they were purchased before or after 1 April 2023.

The tax treatment for debt mutual fund units purchased before 1 April 2023 continues to follow the earlier rules.

If such units are sold after being held for more than 24 m...