Mutual funds are instruments that pool in savings of various investors to invest them in shares, debt securities,money market securities etc.
Mutual funds further invest your money in :
- Debt Instruments – Debt Mutual Funds.
- Equity – Equity Mutual Funds.
You have been advised many times to invest your money in mutual funds by various experts.But,are you aware of the mutual fund taxation procedure.
Here we have simplified things for you to answer your queries regarding :
What is Tax on mutual fund ?
What is Short term Capital Gain and Long term Capital Gain in relation to Equity funds ?
What is Short term Capital Gain and Long term Capital Gain on Non-Equity funds ?
How these Capital Gains on mutual funds are taxed ?
Here is the answer to all the above queries in a simplified manner.
Just,go through the below char,you will get t to know how Capital Gains from mutual funds are taxed in the short term and the long term :
Tax on Mutual Funds
|Period of Holding||Tax rate
|Equity funds :|
|STCG - Short term Capital Gain||MF units held for less than 1 year ||15%
|LTCG - Long term Capital Gain||MF units held for > 1 year||Taxable @ 10% where LTCG>1 lakh (No indexation benefit) : As per amendment in Budget 2018
|STCG - Short term Capital Gain||MF units held for less than 3 years ||As per Individual tax slab rates
|LTCG - Long term Capital Gain||MF units held for > 3 years||20% (with indexation)
Download in pdf format : Tax on mutual funds
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