Claim audit · FY 2026-27
“Market-linked debentures listed on the exchange have no LTCG after 1 year”
The condition that decides it
True only for MLDs issued before 1 April 2023, which kept the LTCG-at-12.5% treatment. New MLDs under section 50AA (Finance Act 2023) treat the entire gain as interest income taxed at slab regardless of the holding period.
What the department sees
HIGH
Data the Income-tax Department already receives automatically — the reel doesn't mention this part.
The real math
A ₹10,00,000 investment in a new market-linked debenture bought in June 2023 and redeemed in 2026 returns ₹12,50,000. Under section 50AA, introduced by Finance Act 2023, the entire ₹2,50,000 gain is deemed interest income — not capital gains — and is taxed at the investor's slab rate regardless of the holding period. At a 30% slab, that is ₹75,000 of tax. The pre-April-2023 MLD the investor also holds, with a ₹1,80,000 gain after 18 months, keeps the older treatment: long-term capital gain at 12.5%, which is ₹22,500. The reel's claim — 'hold listed MLDs over a year and there is no LTCG tax' — inverts the change: new MLDs lose capital-gains treatment entirely and are taxed as interest at slab. The rate outcome depends on the issue date and the investor's slab, so the 'no LTCG tax' framing is a trap for anyone buying after April 2023. The trap is compounded by broker statements that still label MLD gains as capital gains, so taxpayers under-report interest income and face mismatch notices. Check the issue date before relying on any no-LTCG advice.
Questions people actually ask
There's a right way to do this
How is debt mutual fund redemption taxed in FY 2026-27?
Sections: 50AA, 48 · We audit claims, not creators. Reviewed by Harun Raaj & Associates, Chartered Accountants · All audited claims