New Delhi, Aug. 20 -- The Finance Act, 2023 overhauled how capital gains from debt mutual funds are taxed, and this has made income tax return (ITR) reporting significantly more complex.

Until 31 March, 2023, gains from debt mutual funds held for over 36 months were treated as long-term capital gains (LTCG) and taxed at 20% with indexation. From 1 April 2023, all such investments are treated as short-term. This means that irrespective of holding period, gains are taxed at the investor's income slab rate.

Depending on the purchase date of the investment, you will need to carefully report gains as short-term or long-term.

ITR-2: For salaried taxpayers with salary and capital gains.

ITR-3: For taxpayers with business/professional income....