The capital gains sphere has become increasingly complex as a result of isolated amendments to the laws governing holding periods and taxation of different asset classes over the years. The finance minister has put forward several changes to the capital gains sphere in order to rationalize the taxation of capital gains. Following our conversation about real estate and equity products, we will now delve into the proposed changes in the taxation of debt and bullion products. Historical background For a very long time all mutual fund schemes were classified into two categories of Equity and Non-Equity schemes which included debt funds of all variations as well as bullion ETF/Saving Funds. The long term capital gains on the first category were taxed at a flat rate of 10% over the initial one lakh which was taxed at zero rate. Short term capital gains on such category were taxed at 15%. This has changed from this year and has been discussed in another article.